Finansudvalget 2022-23 (2. samling)
FIU Alm.del Bilag 134
Offentligt
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European Commission proposal for a reform
of the EU economic governance framework
Maarten Verwey
Director General for Economic and Financial Affairs
May 2023
FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Key objectives and principles of the reform
The key objective of the reform is to strengthen debt sustainability and promote
sustainable and inclusive growth through reforms and investment.
Key principles:
Medium-term approach bringing together fiscal policy, reforms and investment.
Gradual and credible debt reduction underpinned by growth enhancing investment and reforms
for EU priorities.
More national ownership, based on common EU rules and better enforcement.
Simpler rules taking account of different fiscal challenges.
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Context
Legislative proposals follow a long and intense period of consultations and
discussions, which started before Covid and accelerated since October 2021.
Legislative proposals are consistent with the Commission communication on
orientations for reform (9 November 2022).
Several modifications and clarification addressing concerns of Member states
(i.e.
safeguard provisions).
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Key elements of the new framework
Medium-term fiscal structural plans (4-year horizon), proposed by Member States but framed by
requirements.
A country-specific net expenditure path (i.e.
of discretionary revenue measures) will be the
net
single operational fiscal indicator.
should ensure that debt converges to prudent levels.
It
Targeting
net expenditure makes fiscal policy counter-cyclical in normal circumstances.
Extended adjustment period (up to 7 years) underpinned by a specific set of reform and investme
commitments (supporting growth and fiscal sustainability; addressing CSRs and EU priorities).
Additional common safeguards on deficit, debt, backloading and net expenditure growth.
General and country-specific escape clauses for extraordinary situations (severe downturn in the
EU/EA or exceptional events at national level outside the control of the Member States).
Enhanced enforcement.
Changes to the directive on national fiscal frameworks.
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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A country-specific net expenditure path
Single fiscal operational indicator.
Should ensure that:
Debt at the end of the plan horizon (4 years) is, and remains, on a plausible downward
path, or stays at prudent levels, without future adjustment;
Deficit is, and remains, under 3% without further adjustment.
Use of common and transparent methodology for the assessment of the fiscal effo
Commission will provide “technical trajectory” to guide the Member States and to
facilitate multilateral surveillance.
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Additional safeguards
0.5% of GDP minimum adjustment for as long as the deficit is above 3% referenc
value.
Debt at the end of the planning horizon (4 years) lower than at the beginning.
Anti-backloading provision.
Net expenditure growth below medium-term output growth, on average, over the
plan horizon.
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Provisions for Member States with
low public debt challenges
Risk-based surveillance.
Respect of 3% deficit threshold on a “no policy change” basis.
No technical trajectory, but guidance as regards the structural primary balance at
.
the end of the planning horizon
Consideration of long-term fiscal sustainability challenges related to population
ageing.
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FIU, Alm.del - 2022-23 (2. samling) - Bilag 134: Præsentationer, baggrundsmateriale, forslag til spørgsmål og EU-nyt vedr. høringen om reform af EU’s finanspolitiske regler afholdt onsdag den 3. maj 2023, kl. 15-17 i Landstingssalen
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Thank you
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