Rethink of the Stability and Growth Pact

The huge public-borrowing binge needed to fund spending during the Covid-19 crisis is forcing a rethink of the European Union’s rules governing debt and deficits, exposing a political fault line over economic theory.

The quarter-century-old Stability and Growth Pact is contained in a treaty, so any amendments would have to be ratified by 27 legislatures.

The Stability and Growth Pact was forged at the dawn of the euro at the behest of the Germans, who sought a means to enforce spending restraint on their more profligate neighbors to the south. It caps deficits at 3% of gross domestic product and debt at 60% of GDP. 

In 2021 the European Commission activated an “escape clause” in the agreement, freeing countries to spend extraordinary sums to salve the human and economic pain of Covid. Nations must now agree on what will happen when the suspension ends in 2023.

Italians and the French, and including Spain and others, argues the pact’s arbitrary constraints act as a brake on economic growth and contribute to making debt loads unsustainable. Those with long memories will recall how, in its early years, its limits proved too strict even for Germany

Blooomberg 21 December 2021

https://www.bloomberg.com/news/articles/2021-12-21/europe-s-pandemic-driven-political-showdown-over-economic-theory-and-debt

RE: Alla insiktsfulla personer, kanske även Gunnar Hökmark, har från början förstått att Stabilitetspaktens regler var orimliga. Varför skapade man ändå dessa regler?

För att lura det tyska folket att överge sin älskade D-Mark.

Federalisterna är totalt samvetslösa i sin kamp för att skapa en Superstat byggd på The Treaty of Rome.