Eu Finance Ministers Meet To Hammer Out Deal On Debt Rules Reform

BRUSSELS,  Dec 7 (Bernama-dpa) -- EU finance ministers meet in Brussels on Thursday and Friday, trying to find consensus on a contested reform of the bloc's debt and deficit rules, reported dpa news.

Economic EU heavyweights Germany and France had been at loggerheads over how strict future rules should be but recently showed a willingness to compromise.

Berlin has been insisting on standardised minimum debt and deficit reduction targets for highly indebted countries using the euro currency, a call long dismissed by Paris.

In recent weeks, however, France warmed up to the idea of safeguards for public debt and deficits, according to German officials.

The bloc's strict debt and deficit rules are suspended until the end of the year, after the Covid-19 pandemic prompted even frugal countries like Germany to take on large amounts of public debt, prompting calls for reform.

In April, the European Commission proposed to grant highly indebted countries more leeway in reducing public debt to enable large public investments needed to tackle climate change, transit to sustainable energy and modernise economies.

Under the reform plans, countries would still be obliged in the long term to reduce their debt to 60% of their economic output and keep deficits under 3 per cent of gross domestic product (GDP).

Highly indebted countries are however to get more time to reduce debt than under the currently suspended obligation to cut excessive debt by 5 per cent per year.

The previous rules are set to apply again from 2024 if no compromise is found.

Once EU ministers reach an agreement, the details of the reform still need to be finalised in negotiations with the European Parliament.

-- BERNAMA-dpa