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Christian Lindner calls for more binding and realistic EU debt rules


Finance Minister Lindner outlined his ideas for a reform of the EU Stability Pact in the "Handelsblatt". He accused parts of the SPD and the Greens of having an “idiosyncratic understanding of the constitution”.

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Finance Minister Lindner: "Everyone Takes a Position"

Photo: IMAGO/Florian Gaertner / IMAGO/photothek

Federal Finance Minister Christian Lindner wants to keep the core of the European debt rules, but wants to make changes to the details.

In an interview with the "Handelsblatt", he acknowledged the upper limits of three percent of economic output for new debt and 60 percent for total debt.

"We would not agree to such a contract change," said the FDP chairman, with a view to a relaxation of the specifications that was sometimes called for.

The so-called Maastricht criteria remain.

“The need for reform lies elsewhere.

We need a more reliable and ambitious path to debt reduction.« In the past, there has been a lack of implementation.

Many countries have been above the limit values ​​for years without any noticeable consequences.

In the corona pandemic, debt has shot up again significantly.

The EU Commission will probably present proposals for reforming the Stability Pact in the autumn.

Lindner spoke out in favor of EU members only showing an annual structural deficit of 0.5 percent of economic output or at least approaching this goal.

"My proposal is therefore aimed at making these medium-term budgetary targets binding."

Lindner also signaled a need for action with the so-called twentieth rule, which is currently not applied.

According to this, euro countries with a debt ratio of more than 60 percent actually have to reduce a twentieth of the difference between 60 percent and the actual ratio every year.

This would particularly hit Greece and Italy, which have the highest levels of debt.

"Here I recommend realism," says Lindner.

»After the pandemic, the debt ratios are so high that this requirement would objectively overwhelm certain countries«.

The rule has been overtaken by reality.

If the reduction path to the medium-term budgetary target becomes binding, the twentieth rule could be dispensed with.

The federal government is unanimous about this proposal.

"Progress instead of left swing".

When asked how other EU states, some of which are calling for the relaxation of debt rules, are reacting to his proposals, Lindner said: »Everyone takes a position.

I have now done that for Germany.« He pleads »for more binding rules, but on a more realistic level.

Almost like Halloween: trick and treating«.

Lindner also confirmed that he wanted to comply with the debt brake enshrined in the Basic Law again in 2023.

As things stand at present, suspending them again would be unconstitutional.

"Here, parts of the SPD and the Greens have an idiosyncratic understanding of the constitution."

The head of the FDP has repeatedly described it as his party's task "to keep this country in the middle and to achieve progress instead of a shift to the left."

A permanent stop to the supply of Russian gas is already a known scenario and would not justify another exemption from the debt brake, Lindner continued.

"Should there be a totally unexpected shock, I will do whatever is necessary to prevent harm to this country."


Source: spiegel

All business articles on 2022-08-04

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