Belgian presidency strikes a deal to revamp the EU’s economic governance rules

The representatives of the Council of the European Union, the European Commission and the European Parliament  © Belgian presidency

On Saturday 10 February negotiators from the Belgian presidency and the Parliament reached a landmark agreement to overhaul the EU’s economic governance rules. The goal is to ensure sound and sustainable public finances across all member states while fostering inclusive growth and job creation through strategic structural reforms and investments.

The EU’s economic governance rules exist to facilitate coordination of economic policies among EU countries. The last set of rules dated back to 1991, when the so-called “Maastricht criteria” was established to ensure economic convergence between the member states of the European Union. These rules were set aside in 2020 to help member states address the economic challenges posed by the COVID-19 pandemic and geopolitical tensions. 

The European Commission presented a new set of legislative proposals in April 2023 to modernise the existing rules. Under the Spanish presidency, the Council of the European Union agreed on a negotiation mandate (general approach) in December 2023, following guidance from the European Council.  

Since the very first days of 2024, the negotiators of the Belgian presidency have been working on a possible compromise with the European Parliament on the preventive arm regulation of the Stability and Growth Pact. At the 6th trilogue in just 3 weeks’ time, the negotiators reached a provisional agreement.  

“The new rules will significantly improve the existing framework and ensure effective and applicable rules for all EU countries. They will safeguard balanced and sustainable public finances, foster structural reforms, and enhance investments, growth and job creation throughout the EU. I’m glad that we have found a balanced agreement that will now allow for a swift implementation”

Vincent Van Peteghem, Belgian Minister of Finance

The primary objective is to ensure that government deficits remain below 3% of GDP and public debt below 60% of GDP. However, the updated rules introduce more flexibility for member states. The updated framework will focus on sustainable debt management, tailored to each country’s specific situation.   

Additionally, EU countries will be required to implement reforms and investments to foster economic growth. A robust enforcement mechanism will ensure that countries fulfil their commitments.  

Deputy Prime Minister Vincent Van Peteghem represented the Council and chaired the meeting. MEPs Irene Tinagli, Esther De Lange, Margarida Marques and Gabriele Bischoff represented the European Parliament. Executive Vice-President Valdis Dombrovskis represented the European Commission. 

The next steps involve the formal approval of the new rules by the Council and the Parliament (for part of the rules).  