The recent vote on EU fiscal rules has sparked a debate about the balance between fiscal responsibility and green investment. The approved revisions, intended to return to fiscal responsibility after the pandemic, have been welcomed by some MEPs but have raised concerns among others.
The new rules require governments to keep budget deficits under 3% of GDP, a move that critics argue will leave member states with a public funding gap of billions of euros. As a result, only three EU countries are projected to meet their estimated green and social investment gaps in 2027, according to a study published by the European Trade Union Confederation (ETUC). The ETUC estimates that governments will need an additional €300-420bn annually to achieve green and social goals over the next few years.
However, many MEPs support the return to fiscal responsibility, arguing that it is necessary to control public spending. The European Economy Commissioner, Paolo Gentiloni, described the approved compromise as a result of the determination to improve the current legislative work.
Despite the concerns raised by some MEPs, the proposal is set to be finalized by agriculture ministers at a meeting next week. The outcome of this meeting will determine the ultimate impact of the revised EU fiscal rules on green investment and public spending.
