Support public investments for a stronger, more resilient and sustainable economy

The plenary vote in the European Parliament about the final text reforming the EU economic governance will take place on April 23.

In the Fiscal Matters coalition, we unanimously consider that:

• The new rules would provide, in several cases, more fiscal space than the old ones.
• However, they do not fundamentally move away from the philosophy of the existing EU fiscal rules, i.e., they continue to be based on arbitrary debt- and deficit-to-GDP ratios.
• They will require unnecessary budget cuts that are not needed for debt sustainability and stand in the way of public investments towards a stronger and more resilient economy. This will have an adverse impact on social rights and the green transition. A recent study by the New Economics Foundation (NEF) and the European Trade Union Confederation (ETUC) on estimated impacts on social investment. Initial assessment by Bruegel of the Council’s position on the rules (which has not significantly changed in trilogue).
• They will worsen existing social and green investment gaps and be a major barrier to achieving a just transition to climate neutrality.
• If adopted, we will need alternative ways of financing in a just transition (such as a permanent EU fiscal capacity, EU-own resources (wealth tax, financial transaction tax etc.).

For this reason, we are putting forward our demands for the next mandate ahead of the Special European Council on April 17–18 in an open letter. We ask for, among other priorities, a new EU fund for just transition and progressive taxation.