Fiscal Rules must stay suspended until they are reformed or dropped – MEP MacManus

Sinn Féin MEP Chris MacManus, a member of the European Parliament’s Economic and Monetary Affairs Committee, has welcomed the call from outgoing Eurogroup Chair Marion Centeno for reform of the EU’s fiscal rules and for there to be no rush back to the strict budgetary structure. He said today’s economic forecasts from the EU Commission only highlights further the need for reform.

MEP MacManus said:

“I am very glad to see Mario Centeno’s remarks on the fiscal rules in the context of a post-Covid Europe. This is a debate that must be had before we blindly return to rules which have the potential to artificially and unnecessarily drag the Eurozone countries into an unnecessary deeper recession. Today’s economic forecasts from the EU Commission only highlights further the need for reform.

Sinn Féin is opposed to the fiscal rules as they can force austerity as the only approach to a crisis and also because they are an unacceptable impingement on any state’s economic sovereignty. Many in Europe have discussed replacement of the rules with a Sustainable and Development Pact.

What is certain is that rushing back into the fiscal rule straitjacket has the potential to throw away much of the sacrifice people and countries have made to rebuild economies and societies in the wake of this pandemic. Mr. Centeno is not alone in his calls. The European Fiscal Board, hardly a leftish think-tank, has said the debt rule is now unrealistic and that the rules should ream in suspended.

In contrast, Eurogroup chief nominee Paschal Donohue’s application letter to the Eurogroup specifically seeks a return to the fiscal rules. Once again, the Dublin government is on the side of austerity and cannot see the potential for reform.

Ireland, and the rest of Europe, needs time to recover using the current breathing space in the fiscal rules and State Aid rules to do whatever is appropriate for their economies. A rush back to failed old policies which could spin us into a deeper recession for the sake of box ticking must be opposed. A long overdue debate has begun and must not be brushed over. A return to the fiscal rules will exacerbate the debt crisis, they must be dropped or radically reformed to allow Europe recover.” ENDS