“EU must face up to reality of the failed fiscal rules” – Chris MacManus MEP

Sinn Féin MEP Chris MacManus, a member of the EU Parliament’s Economic and Monetary Affairs Committee, has said the re-opening of the consultation process on reform of the fiscal rules should start by accepting that the current rules have failed. He called for radical reform of the rules with government spending on social and environmental infrastructure to be exempted under the rules.

MacManus said:

“I welcome the re-opening of this consultation process on the fiscal rules. As soon as the true impact of the covid crisis became apparent the EU rightly suspended the fiscal rules.  The fact is that if they were to be reintroduced tomorrow without any changes the impact on countries’ economies would be brutal. They are being reviewed because they failed. The 60% debt rule, which was always arbitrary, is simply redundant in this new period.”

The Midlands Northwest MEP said a fairer system must be pursued. “Radical reform is required to make the rules fairer and economically sounder. Government investment in social infrastructure like housing or in environmental infrastructure and investment to meet the climate challenge must be treated differently or exempted from the rules.”

MacManus concluded by warning of past mistakes. “We also need to consider the option of ‘less Europe’ when proposing reform of the fiscal rules. Insisting on additional, deeper fiscal rules should not be the only option. The EU says it must not repeat the mistakes of the past. If they are serious, they must consider that strict, ‘one size fits all’ rules that can prevent investment and borrowing for investment might be part of the problem, not the solution.” ENDS