EU fiscal rules not under attack

German Economy Minister Sigmar Gabriel suggested on Thursday that the EU could ease its rules on co-financing investment projects, but insisted that he was not seeking to undermine the wider budget framework.
"Nobody is attacking the Growth and Stability Pact," Gabriel told the German parliament's low house, referring to the European Union's budget rules requiring member states to keep a lid on their public deficits.
"No-one is seeking to creatively redefine the rules," he said after recent comments by him had sparked new debate in Germany as to whether the pact is too strict and hurting economic growth.
Last week, Gabriel had suggested that countries such as France and Italy could be given more time to get their finances in order, remarks which were interpreted as a call for relaxing the stability pact.
But since then, German officials have stated repeatedly that the rules of the pact must be respected.
Nevertheless, "there are many opportunities for being flexible within thepact," Gabriel said on Thursday.
"There are many ways for reforms and investment to go hand in hand," he said.
Access to European funds for investment could, for example, be eased, Gabriel suggested.
"If a country such as Italy does not have access to 15 billion euros ($20 billion) of European funds because it cannot put the same amount of money on the table without breaching the deficit criteria, then why not simply release the funds and forego the co-financing requirement," Gabriel said.
The stability pact is likely to figure highly on the agenda of an EU summit being held in Brussels on Thursday and Friday.
German Economy Minister Sigmar Gabriel suggested on Thursday that the EU could ease its rules on co-financing investment projects, but insisted that he was not seeking to undermine the wider budget framework.
"Nobody is attacking the Growth and Stability Pact," Gabriel told the German parliament's low house, referring to the European Union's budget rules requiring member states to keep a lid on their public deficits.
"No-one is seeking to creatively redefine the rules," he said after recent comments by him had sparked new debate in Germany as to whether the pact is too strict and hurting economic growth.
Last week, Gabriel had suggested that countries such as France and Italy could be given more time to get their finances in order, remarks which were interpreted as a call for relaxing the stability pact.
But since then, German officials have stated repeatedly that the rules of the pact must be respected.
Nevertheless, "there are many opportunities for being flexible within the pact," Gabriel said on Thursday.
"There are many ways for reforms and investment to go hand in hand," he said.
Access to European funds for investment could, for example, be eased, Gabriel suggested.
"If a country such as Italy does not have access to 15 billion euros ($20 billion) of European funds because it cannot put the same amount of money on the table without breaching the deficit criteria, then why not simply release the funds and forego the co-financing requirement," Gabriel said.
The stability pact is likely to figure highly on the agenda of an EU summit being held in Brussels on Thursday and Friday.