Finance ministers agree on new EU budget rules

After months of negotiations, the European Union's finance ministers reached an agreement on Wednesday on new budget rules for member states, the Spanish council presidency announced.

The finance ministers of the 27 member states were already close to an agreement at their meeting on 8 December, but managed to seal the deal on Wednesday. The finance ministers of France and Germany, Bruno Le Maire and Christian Lindner, had already signalled on Tuesday evening that a deal was close.

Details will be announced at a press conference later in the evening. What is already clear is that the existing benchmarks of a maximum debt-to-GDP ratio of 60 per cent and a maximum deficit of 3 per cent will remain untouched and will have to be pursued. However, different member states will be able to follow a more tailored fiscal path that leaves room for investment and reforms.

The difference between the old budget rules, whose application has been suspended since the outbreak of the Covid-19 crisis, and the new ones is that the latter are credible, Lindner said on Tuesday. "The old rules were strict on paper but not on application," he said.

^{French Finance minister Bruno Le Maire and his German counterpart during a joint press conference on Tuesday on the reform of Europe's economic governance © Alexis Jumeau/ABACAPRESS.COM}