G. Skaistė: "The revised EU fiscal discipline rules reflect the changed geopolitical reality"
On Wednesday evening, at an informal meeting of the Council of Finance Ministers of the European Union (EU) (ECOFIN), a political agreement was reached on the revision of the EU fiscal rules. The reformed rules envisage a gradual deleveraging of highly indebted countries, leaving room for reforms and investments that promote economic growth and fiscal sustainability, and strengthening enforcement oversight.
"It is positive that after long discussions we managed to find a consensus on the revision of the EU fiscal rules. The reformed rules, ensuring their effective implementation, will lead to more realistic debt reduction in highly indebted EU countries, while ensuring that low-indebted countries, such as Lithuania, maintain fiscal sustainability. In the discussions, we consistently emphasized that in addition to flexibility for investments and reforms that increase economic growth potential and fiscal sustainability, we must also provide reasonable flexibility for investments in increasing defense capabilities. It is to be welcomed that other EU countries have heard this need, the revised rules reflect the changed geopolitical reality and will create more space for investments in this vital area," emphasized Minister of Finance G. Skaistė.
According to G. Skaistė, the transition to individualized setting of fiscal goals for individual countries is evaluated positively, as it will strengthen the national responsibility of states and lead to more consistent and effective compliance with fiscal rules. The new system will enable a better assessment of the situation of the economy and public finances of specific countries and, accordingly, set realistic fiscal goals.
The minimum safeguards for debt reduction and deficit size will also ensure that the system maintains equal treatment of countries. In addition, it is important that low-debt countries, such as Lithuania, will be set parameters that will ensure the maintenance of a sustainable debt level in the medium-long term.
At the same time, the Minister emphasized that the revised fiscal rules will create additional incentives to implement reforms and investments that increase economic growth. This should strengthen the EU's economic potential and resilience to future shocks.
After reaching a political agreement in the EU Council, it is expected to find a final agreement with the European Parliament at the beginning of next year. It is planned that the updated EU legislation governing the EU fiscal rules will enter into force in the first quarter of 2024.
Last updated: 17-01-2024
Related news:
S&P Global Ratings confirmed Lithuania’s credit rating
Defence bonds were distributed for EUR 80.5 million across recent issues