BUDAPEST, Sept 13 (Askume) – Only a handful of European Union countries will be able to submit debt reduction plans to the European Commission by a September 20 deadline, dealing a blow to the credibility of the bloc’s new financial rules.
The rules, which came into force in April, are aimed at showing markets how EU governments, many of which are saddled with high public debt following the COVID-19 pandemic and the energy crisis, will reduce debt.
“I stress the importance of this work because it is really important that this framework gets off to a good and credible start,” Pascal, the chairman of euro zone finance ministers, said after discussing the timetable at informal talks hosted by Donoghue at a “Budapest” press conference.
One hurdle is that several EU countries either have upcoming elections or have not yet had their governments sign off on such a plan following recent elections.
“Only a few ‘top players’ will submit plans before September 20,” said an EU official familiar with the process. “Most student unions are demanding an extension of the deadline to October 15 or beyond.”
On October 15, euro zone countries will submit key assumptions for the 2025 budget to the European Commission, and many countries expect the two reports to be merged. But some may need more time.
France has sought the extension as it begins to form a government after an indecisive election result two months ago that has made it difficult for the weak ruling coalition to implement any austerity measures.
Italy, which has the second-highest public debt in Europe, will have regional elections in October and November, and the right-wing government is currently promising tax cuts into 2025 and support for families and jobs.
Germany goes to the polls in 12 months and EU officials say Berlin has yet to decide what it will propose in its long-term plans.
The situation is also unclear in Lithuania, which goes to the polls next month, and in Belgium, which still has no government after elections in June. Austria will hold elections at the end of September and Romania in December.
Asked whether EU governments could meet the September 20 deadline, Donoghue said: “It’s clear to me that all member states are trying their best.”
“It is true that political situations that occur in different countries are an inevitable part of our democratic process, but our new framework already recognizes this,” he said, suggesting that delays in protests would be allowed.
