The European Parliament and member states reached an agreement early yesterday on reforms to EU budgetary rules aimed at boosting investment while keeping spending under control.
The text modernizes the current rules, known as the Stability and Growth Pact, created in the late 1990s, which limit countries’ debt to 60 percent of GDP and public deficits to 3 percent.
“Deal!” the Belgian Presidency of the Council of the EU said on social media platform X after 16 hours of talks.
The EU spent two years making an intensive effort to develop reforms supported by the more frugal member states like Germany and other countries, such as France and Italy, which seek more flexibility.
After much wrangling between Berlin and Paris, the 27 member states struck a deal in December last year, then began talks with negotiators from the European Parliament.
The text was criticized for its great complexity and derided by left-wing officials as a tool for imposing austerity on Europe.
The negotiators finally reached an agreement early yesterday, in time for the text to be voted on in Strasbourg this spring before the parliamentary break ahead of European elections.
The reforms will be formally adopted after agreement between lawmakers and states.
The agreement will allow member states to apply the new rules to their next year’s budgets.
“The new rules will help achieve balanced & sustainable public finances, structural reforms, foster investments, growth & jobs creation in the EU,” the Belgian presidency said.
During the initial debates between countries, the battle was fierce over how much those old limits should be relaxed to give more room for investment.
With war raging in Europe and the EU making a green transition push, states led by France argued for allowing more space to finance these key areas, including, for example, supplying critical arms to Ukraine.
While confirming the previous limits on debt and budget deficits, the new agreement allows more flexibility in the event of excessive deficits. The text provides looser fiscal rules more adapted to the particular situation of each state, allowing big spenders a slower route back to frugality.
The tailor-made approach means each country presents their own adjustment trajectory to ensure their debt’s sustainability, giving them more time if they undertake reforms and investments and allowing a less painful return to fiscal health.
Monitoring would focus on expenditure trends, an economic indicator considered more relevant than deficits, which can fluctuate depending on the level of growth.
However, Germany and its “frugal” allies managed to tighten this budgetary framework by imposing a quantifiable minimum effort to reduce debt and deficits for all EU countries, despite the reluctance of France and Italy.
These modifications have greatly complicated the text.
“We have a deal! A new economic governance framework was much needed,” Dutch MEP Esther de Lange said on X.
“We have ensured that the new fiscal rules are sound and credible, while also allowing room for necessary investments,” said De Lange, of the center-right European People’s Party Group.
The reforms are also supported by the EU’s Renew liberals and a large majority of the Socialist and Democrat groupings.
DIGITAL RIGHTS: Although Ottawa did not identify any particular country as a risk in the video-game sphere, it has repeatedly accused China and Russia of interference Canada is to enhance its scrutiny of foreign investments in video games and other interactive media, seeking to block outside actors from manipulating public opinion in the country. “Hostile state-sponsored or state-influenced actors may try to leverage foreign investments in the interactive digital media sector to spread disinformation and manipulate information,” Canadian Minister of Innovation, Science and Industry Francois-Philippe Champagne said on Friday in a joint announcement with Canadian Minister of Heritage Pascale St-Onge. Starting immediately, Ottawa is to increase scrutiny of investments “by entities owned or influenced by foreign states, particularly states that engage in activities that may pose a risk
CHIEF OPERATING OFFICERS: Y.J. Mii, who is in charge of R&D, and Y.P. Chyn, who is responsible for fab operations and management, start their new positions today Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday promoted Y.J. Mii (米玉傑) and Y.P. Chyn (秦永沛) as co-chief operating officers (COO) of the world’s biggest contract chipmaker, signaling the formation of a succession team. The latest executive reshuffle comes after TSMC chairman Mark Liu (劉德音) in December last year announced that he is to retire this year. CEO C.C. Wei (魏哲家) has been recommended as his successor while continuing to serve in his current position. Mii and Chyn, as well as the company’s human resources, finance, legal and corporate planning units, are to report directly to Wei, a company statement released after the
SEMICONDUCTORS: Under India’s chipmaking incentive plan, the government would bear half the cost of any approved project, with an initial budget of US$10 billion for the task The Indian government, after years of watching from the sidelines of the chips race, now has to evaluate US$21 billion of semiconductor proposals and divvy up taxpayer support between foreign chipmakers, local champions or some combination of the two. Israel’s Tower Semiconductor Ltd is proposing a US$9 billion plant, while India’s Tata Group has put forward an US$8 billion chip fabrication unit, people familiar with the matter said. Both projects would be in Indian Prime Minister Narendra Modi’s home state of Gujarat, the people said. Semiconductors have grown into a key geopolitical battleground, with the US, Japan and China investing heavily in
AI PRIORITIZED: Analysts said the move was a good strategic decision for Apple, which was still years away from producing a vehicle and facing a cooling market Apple Inc is canceling a decade-long effort to build an electric vehicle (EV), people with knowledge of the matter said, abandoning one of the most ambitious projects in the history of the firm. Apple made the disclosure internally on Tuesday, surprising about 2,000 employees working on the project, the sources said. The decision was shared by Apple chief operating officer Jeff Williams and Kevin Lynch, a vice president in charge of the effort, the sources said. The two executives told staff that the project would begin winding down and that many employees on the EV team — known as the Special Projects Group