The finance minister expects an agreement by the end of the year in the EU on budget rules

Finance Minister Fernando Medina said he expects an agreement in the European Union (EU) by the end of the year at an extraordinary meeting in two weeks on budget rules, debt and deficit ceilings.

Finance Minister Fernando Medina said he expects an agreement in the European Union (EU) by the end of the year at an extraordinary meeting in two weeks on budget rules, debt and deficit ceilings.

“There will be a new Ecofin meeting [estrutura que junta os ministros da Economia e Finanças da UE] “I believe that this will be an opportunity and a moment to reach the first global agreement on the new rules of European governance, before the end of the year, in the next few weeks,” the official said.

Speaking to Portuguese reporters in Brussels after an informal dinner on Thursday and an Ecofin meeting today, Fernando Medina attributed the months-long deadlock without consensus among the 27 on the reform of budget rules to “the difficulty of the matter”.

“It is one of the most important things from the point of view of economic integration in the European space, and it is one of the most important in terms of its impact on the daily life of citizens, because, in essence, it guides which countries will adopt budgetary strategies, what budgetary margin is available and how it can be used. […] And there is great diversity among countries,” he said.

According to a government official, Portugal “will not be in the group” of 12 countries that need to make budget revisions because it has done its “homework” to reduce public debt and deficits.

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EU finance ministers will meet in an extraordinary meeting less than two weeks after today’s disagreement over budget rules.

After an informal dinner that lasted until 03:00 Thursday night (local time, minus one in Lisbon), Lusa was given this information by several European sources close to the discussions, and the positions between the 27 ministers were still very distant”.

Discussions continued this morning at the formal Ecofin meeting in Brussels, but various European sources told Lusa that “there will be no agreement today”, which is why an extraordinary meeting of EU economy and finance ministers is scheduled for two weeks’ time. Christmas.

They mentioned that the mentioned dates were December 18 or 19.

There is a plan from Spain to reduce debt by at least one percentage point per year for countries with a debt ratio above 90% of GDP and half a percentage point for countries between this level. and a ceiling of 60% of GDP.

Spain’s proposal also preserves the objective of reducing the deficit to 1.5% as a safety margin, even if the general account deficit remains below the ceiling of 3% of GDP.

The demands were imposed by a group of ‘extremely austere’ countries led by Germany, which has always called for quantitative targets against debt, but are being contested by countries such as Italy and France, which are demanding more flexibility, European sources said.

France readily agrees that structural adjustment should be reduced from 0.5% to 0.3% of GDP for countries involved in investments and reforms.

Given the European elections in June 2024, it is certain that this document should already be ‘closed’, giving the necessary time for co-legislative (Council and European Parliament) negotiations.

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The debate comes as these budget rules are expected to resume next year after being suspended due to the Covid-19 pandemic and the war in Ukraine, despite the usual ceilings of 60% and 3% of GDP for public debt. GDP for the deficit.

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