The Netherlands will be ‘constructive’ on SGP reform, Kaag says
The Netherlands will take a constructive approach towards reforming EU fiscal rules if that proves necessary because of the Russian war against Ukraine, finance minister Sigrid Kaag has told MPs.
The war will affect European economies and this means it may become more difficult for EU countries to meet the Stability and Growth Pact rules, Kaag said, emphasising the ‘importance of a united and decisive Union’ in the face of Russian aggression.
The SGP rules states that EU countries are expected to keep their public debt below 60% of GDP while their budget deficits should not exceed 3%.
In her briefing, Kaag said that the Netherlands would be ‘constructive’ about modernising the fiscal rules as long as any changes lead to sustainable debt reduction.
‘Adjustment or replacement of the current debt reduction criterion is an option where the cabinet can be constructive,’ Kaag said.
‘This is provided there are good guarantees that compliance and enforcement of the modified criterion improves, member states with high debts provide sufficient incentives for debt reduction and member states structurally implement reforms to strengthen their economy and public finances.’
The eurozone countries and the European Council are currently holding consultations on the SGP which are expected to finish in May.
The rules have been under discussion for years, with some member states saying they are too strict, too complex and not sufficiently enforced.
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