New EU fiscal law can boost growth and competitiveness while maintaining fiscal responsibility - MEP Kelleher

Published on: 23 April 2024

“Striking the right balance between the EU’s fiscal sustainability and supporting growth and competitiveness is at the heart of the final negotiated agreement on the Union’s Economic Governance Review,” says Irish MEP, Billy Kelleher.

Kelleher, who led the negotiations on behalf of the centrist Renew Europe group in the Parliament, and who played the kingmaker role when it came to forming a majority coalition, was speaking as assent to the final deal struck between the European Parliament and the European Council was given in Strasbourg this week.

“This compromise provides for an updated economic governance framework for all 27 EU Member States. In 2020, the EU´s existing fiscal rules were suspended to allow Member States greater budgetary flexibility to cope with the impact and aftermath of the Covid 19 pandemic, as well as the war in Ukraine and the ongoing conflicts in the Middle East.

“With the reactivation of the EU’s Stability and Growth Pact in 2024, I made sure that the new framework strikes the right balance between the need to stabilise our economy and return to sustainable debt levels on the one hand and have enough flexibility for promoting the strategic investments and reforms the EU needs on the other.

“Applying the same rules as the past would undoubtedly mean a return to austerity for many Member States and would inhibit the EU’s ability to compete with key geopolitical players such as China, the US and India in an increasingly volatile world.

“The last few years have been tumultuous, tough on our citizens, and a burden on our economy. This framework helps Member States determine a tailored-made plan to return to sustainable debt levels, whilst having the necessary flexibility to make investments for our future, as well as the necessary tools to address the climate-related challenges we face.

“Contrary to what some political groups and activists say, this new framework does not prohibit any investments but does help channel public money into much-needed reforms and investments.

“As a responsible politician and as someone charged with legislating for the Union’s future, I do not have the luxury of accessing the magic money tree that most left wing politicians believe will fund all their political promises.

“I believe that this agreement will allow Member States to address existing investment gaps by providing enough fiscal space for strategic public spending that will both strengthen the EU Single Market and help to deliver the digital and green transitions,” concluded Kelleher.