BFF-40 Germany’s Scholz opposes changes to EU deficit rules





Germany’s Scholz opposes changes to EU deficit rules

BERLIN, Sept 28, 2020 (BSS/AFP) – German Chancellor Olaf Scholz on Monday said he saw no need to change the European Union’s deficit rules that are currently suspended to help member states cope with the coronavirus.

“We have shown that we have the necessary flexibility during this crisis,” Scholz told reporters in an online press conference.

“The current rules are working.”

The remark came in response to comments by France’s European Affairs Minister Clement Beaune last week, who said Paris “cannot imagine putting the same pact back in place” after the worst of the pandemic is over.

The EU’s deficit and public debt rules are on hold at the moment, giving governments free rein to stimulate their economies with major spending programmes to fight a historic recession.

The rules theoretically limit a government’s annual public deficit at three percent of gross domestic product, and debt at 60 percent, though the ceilings are frequently violated.

Governments are very reluctant to decide on a date when the rules should fall back into place, given the economic uncertainty caused by the Covid-19 pandemic.

Brussels has said it wants to reassess the situation in the spring of 2021.

To change the rules would take years given the strong views on the matter, especially from fiscally conservative Germany and the Netherlands.

But opponents of the pact, which was toughened during the eurozone debt crisis, believe that they impose needless austerity on national economies.

BSS/AFP/IJ/2139 hrs