Schultz cools down the deficit and debt rules required by France and Spain to relax

Those who believe in the Chancellor of the German Social Democratic Party Will clear the way for the relaxation of the EU’s deficit and debt rulesAn initiative that has been blocked by Angela Merkel, they face Hard to wake upWhen he visited the European capital for the first time after taking office this Wednesday, Olaf Schultz It eclipses any prospects for reform of the Stability Pact and calls for “financial soundness.” He held a joint press conference in Paris with Emmanuel MacronWhich makes the flexibility of the agreement an absolute priority for France, the EU’s rotating presidency. Will be held from January to June 2022.

At the endless press conference this Thursday, Macron made it clear that he will be committed to Smooth budget rule reformLimiting the deficit to 3% and the debt limit to 60%. These thresholds-which have been on hold since the Covid-19 outbreak, but will be applied again in 2023-no longer respond to the reality of the pandemic, and no longer consider “large-scale investment” to promote the dual transformation of digital and green need.

The French President proposed two specific reform plans. Oh oh Make the next generation fund permanentSo all investments are made within Europe and have common debt. Or if it turns out to be infeasible, Exclude national public investment from deficit calculations. The government Pedro Sanchez The position defended is very similar to that of Paris.

However, the new prime minister has closed the door to radical reforms of budget rules following the lines advocated by France and Spain. “We have promised Flexibility to use the Stability Pact And growth to define a common economic policy,” Scholz said in reference to his Semaphore Alliance’s government plan. In this plan, the liberal hawk Christian Lindner’s position is very close to that of the thrifty Nordic, occupying Financial investment portfolio.

“It’s about maintaining the growth generated by the recovery plan (the next generation). At the same time, we must work hard to ensure financial soundnessFor me, this is not a contradiction. They are two faces of the same endeavor,” the new German Chancellor insisted.

Macron backed down

By his side, Macron performed retrospective exercises to avoid repeating the ambitious suggestions he made the day before. In his view, the EU must pursue a three-fold goal: consolidate growth and seek full employment, make large-scale investments in industrial alliances to regain sovereignty, and Maintain “budget seriousness” Promote the integration of euro zone countries.

“We must find a mechanism that enables us to achieve the three goals, Either more flexible or new rules“, in defense of the French president. “This is not a question of returning to the debate in recent years (about the confrontation between North and South countries due to austerity), but a question of pragmatically looking for a new agreement,” Macron said.

After staying in Paris, Schultz went to Brussels, where he met with the chairman of the committee, Ursula von Delane; President of the Council of Europe, Charles Michel; And NATO Secretary General, Jens Stoltenberg.

Von der Lein was asked if she felt closer to France or Germany in the reform of the stability agreement, and she avoided taking any positions. In your opinion, the important thing is All governments have had the same diagnosis of this problemFirst of all, all countries in the Eurozone will get rid of the debt level caused by the collapse of economic growth and the huge public assistance deployed to alleviate the crisis.

In addition, if the EU is to achieve climate neutrality and digital transformation, it must retain investment. The President stated that with this common starting point, member states must now agree on the future of fiscal rules, preferably before they are applied again in 2023.

The crisis between Ukraine and Russia

In addition to the reform of the Stability Pact, another major issue that monopolized all Schultz meetings in Paris and Brussels was the crisis in Ukraine and the suspicion of Western allies. Vladimir Putin He intends to invade the country in the coming weeks. The new prime minister expressed concern about the build-up of Russian troops on the Ukrainian border and called for easing tensions and resuming dialogue.

In this sense, Schultz believes that this week’s virtual meeting between US President Joe Biden and Putin is positive. And also prevent Reactivate the so-called “Normandy format”In other words, a direct dialogue between Moscow and Kiev with Germany and France as the intermediary. Macron also claimed the solution.

If Putin finally takes action in Ukraine, what will Germany and the EU do? “It is clear that if border violations occur, Germany, the European Union and other countries will react. But it is also clear that Our task at this time is to prevent this from happeningWe must work together in Europe, and we all agree that the border should not be violated,” the newly appointed prime minister replied.

“We hope that Russia will ease tensions, refrain from invading neighboring countries, and respect the rights of sovereign nations. Otherwise, The EU is not only ready to strengthen existing sanctions, but also ready to take new measures In other fields, from economics to finance, it is tangible,” Von der Lein said.

“Be very clear: We want to establish good relations with Russia, but whether this is possible depends on Russia’s behavior in the first place. Russia is currently choosing scenarios that pose a threat to its neighbors, which will undermine European security,” he emphasized. Chairman of the committee.

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