Dutch CFO ready to change EU fiscal rules – but not fundamentals – POLITICO

The Dutch government wants to reform the EU’s fiscal structure – but don’t ask The Hague to go too far.

“I’m neither a hawk nor a dove,” Sigrid Kaag, the Netherlands’ deputy prime minister, finance minister and leader of the D66 social-liberal party, told POLITICO on Sunday.

“We believe that reform and modernization [Stability and Growth Pact] is necessary,” she said. The system has become so complex with so many other little exits and adaptations that, in the end, it is very difficult to actually adapt or conform to the system itself, in the way that it evolves over time. ”

“We’re looking to establish how the system works,” she added.

Kaag outlined the government’s approach to the ongoing review of EU fiscal rules in a letter to Parliament on Friday, in which she wrote that the existing rules on debt relief were inefficient and rarely executed. Instead, she proposed that countries establish their own debt-reduction trajectory over several years, which would then be enforced by an independent body such as the European Finance Board.

“We want a realistic pace in debt reduction; we want to see real debt reduction happen because it’s important, but [also] space for investments and space for much-needed reforms,” she said.

“So this is a more open and constructive approach with no fixed fixation other than 3% and 60%. But nobody feels the need to argue about those, thankfully. rather, because it’s just a side issue,” she said, referring to the deficit and debt-to-GDP threshold as central to the bloc’s fiscal governance.

At the same time, she expressed doubt about a proposal by highly indebted countries, particularly France and Italy, to block certain investments that do not count deficits and debt calculations, such as those related to relating to climate protection or national defense. The Commission itself was amused by that approach.

“There are risks that come with an approach where you basically align investments into a particular portfolio. Because ultimately, we need to work on reducing debt, we need to. to be transparent, we need to be able to establish effective monitoring,” she said.

Kaag and her counterparts in EU capitals are exchanging ideas on how to reform the bloc’s rules and ensure more consistent enforcement. The committee is in listening mode and will present its proposals this summer, aiming to reach consensus by the end of the year.

It is possible that the negotiations will drag on much longer, but as Kaag put it, “if you plan for a delay, you will experience a delay.”

This article is part of POLITICOPremium policy services of: Financial Services Pro. From the euro area, banking union, CMU, etc., our specialist journalists keep you up to date with the topics driving the Financial Services agenda. Email [email protected] for a free trial.

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