In principle, the rule in the European Union is that the maximum debt ratio may not exceed the threshold of 60 percent, and the GDP deficit may not exceed 3 percent. But in practice, the debt ratio in many countries, including Belgium, is well above 60 percent. The 3 percent standard has also not been met often in recent years.
Europe was forced to relax the rules partly due to the consequences of the Corona crisis and the Ukrainian crisis. Criticisms that it is too strict and too complex have been around for a long time. Now, after months of negotiations, an agreement has been reached on some amendments.
Countries with deficits larger than the 3 percent rule will have to make an annual effort of 0.5 percentage points. Requirements will be higher for countries with a higher debt burden. So they will have to make significant cuts.
On the other hand, countries are given enough time to reduce their debts and future-oriented investments and reforms are taken into account. Finance Minister Vincent Van Peteghem (CD&V), who negotiated on behalf of EU member states, talks about a balanced agreement with a prominent place on reforms and investments as well as debt reduction.
The European Parliament and the 27 EU member states have yet to formally give the green light. This must be done before the June elections.
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