PM wants new European fiscal rules to power strategic investment
Photo: @antoniocostapm

PM wants new European fiscal rules to power strategic investment

Formula should repeat format adopted through pandemic

Prime Minister António Costa has insisted on a European response to the current crisis that repeats the model adopted with the pandemic – advocating fiscal and economic rules that allow key investments to be made.

“We need to change Europe’s economic governance model and, therefore, we should learn from the way we dealt with the two previous crises,” he said, referring to the “rather disastrous results” of the European response to the financial crisis ten years ago and the “rather successful” response to the pandemic much more recently.

The European Union is currently debating a review of fiscal and financial rules and there is a Commission proposal which already has “very positive contributions”, he said – however, in addition to these contributions, “a permanent macroeconomic stabiliser” is needed for “stabilisation in crisis situations”.

Mr Costa was speaking in Alicante, at the end of a summit of nine southern European Union countries (an informal group known these days as MED9, as opposed to the previous tag of ‘Club Med’).

In parallel, and also as happened with the pandemic, Portugal’s PM stressed there is a need for “a permanent investment instrument” to ensure that “strategic investments” that the European Union needs will be made, in areas such as energy or technology, for example, with a view to the so-called energy and digital transitions.

Mr Costa recalled that Europe aims to increase its strategic autonomy, which involves reducing its dependence on third parties in terms of energy supply, but also in terms of industrial production, of “key elements” for this energy and digital transition, Lusa continues.

The Portuguese Prime Minister’s statements followed the conclusions of the MED9 summit.

In a final joint declaration, the nine countries agreed that the European Union’s “united and joint approach” to the pandemic “should be maintained” in response to the “challenges resulting from the war” in Ukraine.

The new European economic and fiscal governance model should also “take into account the lessons learned from the joint response to the Covid-19 crisis”, in particular mechanisms adopted in terms of macroeconomic rules and European funds.

“Taking into account the diversity of the economic situation in (EU) member states, the new fiscal rules should be simpler, more investment-friendly,” read the text of what was presented as the “Declaration of Alicante”.

In this context, the MED9 considers that the European Commission’s current proposals are a good basis for discussion.

As for another proposal from Brussels, to set a maximum price for gas, the countries call for a more flexible mechanism to be adopted, “market-based”, and not imposed an unalterable fixed value.

“Moreover, through the rapid implementation of joint gas purchases, we leverage our purchasing power to bring prices down,” the document reads.

This was the 9th summit of the Southern Countries of the European Union, which involve Portugal, Spain, Italy, France, Malta, Greece, Cyprus, Slovenia and Croatia.

The 10th MED9 summit, in 2023, is to be held in Malta.

Source: LUSA