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Macron and Draghi launch debate on European budgetary rules

Published on 17 Dec. 2021 at 17 : 27Updated 23 Dec. 2021 at 17 : 39

Emmanuel Macron takes advantage of his good understanding with the Italian Mario Draghi , alias “Super Mario” when he was at the head of the European Central Bank and had saved the euro for the debt crisis, to launch the debate on the new European growth model he is calling for. The two leaders present in a joint forum published Thursday by the “Financial Times” the reasons why Europe must, in their eyes, change economic and budgetary strategy and implement new rules of the game to meet the challenges of the next decade.

“Climate and biodiversity crises are worsening, while geopolitical and military tensions are intensifying. More than ever, technology has become essential in our daily lives, but it also exacerbates existing inequalities and gives rise to new divides. Demographic changes are fundamentally changing the structure of our societies. In all these areas, the EU must act quickly and boldly, ”the two men wrote.

Concretely, these challenges which require “large-scale investments in research, infrastructure, digital technology and defense” also imply going back on the current budgetary rules which have been put on hold since the start of the pandemic. These rules “both too obscure and too complex hindered state action during crises and overloaded monetary policy.”

Smart reforms

In the future, countries should “have more room for maneuver and be able to carry out the key expenditures necessary for our future and our sovereignty”, explain the two men. It is about carrying out “smart structural reforms.” And in the same way that these rules did not restrict our response to the pandemic, they must not now prevent us from making all the necessary investments ”continues the text.

The governance put in place by the European “Next Generation” recovery plan is “a useful model”, in the opinion of the French and Italian leaders, both for its mode of financing, a common loan from Europeans, and for its ability to assess the quality of public expenditure.

Flexible schedule

Concretely, France, which presents this subject as a priority of the French presidency of the EU , would like to complete the political phase of reflection between European governments on the occasion of the summit of and 11 March. Consensus on common macroeconomic objectives and the amount of investment needed would facilitate the more technical phase which would then begin with the new fiscal framework. The calendar is “flexible” according to the Elysee, while some governments are calling for a rapid reform to be implemented from the start 2023. Why Emmanuel Did Macron sign the platform with Mario Draghi and not with the new German Chancellor Olaf Scholz? The Elysee sidesteps the question a little by emphasizing that the chancellor who has barely taken office has been “informed” of the content of the platform. He apparently did not wish to co-sign it: “We are seeing the emergence of points of convergence on this strategy and we must overcome the oppositions classics between North and South. We are going to conduct a pragmatic debate based on the needs of States. This debate is intended to continue in the coming weeks. ”