German Chancellor Olaf Scholz stressed that “unlimited debt growth is not a good answer” to the investment needs of the economy.
“We want to enable growth and investment to transform our economy. But an unlimited increase in debt will not be a good answer,” Scholz said at a conference of the European Trade Union Confederation, which will bring together about 40 trade unions. representatives from Tuesday to Thursday.
Today, Tuesday, unions raised concerns about the return of austerity to the European Union budget after years of almost unlimited spending to combat the Covid-19 outbreak, the energy crisis and the aftermath of the Ukrainian-Russian war.
“We cannot go back to the fiscal rules that existed before the crisis” in the face of “investment needs for a just environmental transition,” Esther Lynch, general secretary of the European Trade Union Confederation, told Agence France. -Click.
For his part, Scholz said: “We need an agreement on how we can reduce the current high level of debt again” so that “citizens have confidence that their country is capable of acting during a crisis.”
The Stability and Growth Pact, which requires EU members to have budget deficits of less than 3% and public debt of less than 60% of GDP, has been suspended from 2020 to counter the COVID-19 outbreak. It is planned to resume at the end of 2023.
However, at the end of April, the European Commission proposed updating the fiscal rules to give member states more flexibility.
But the project “will lead to a return to austerity and prevent climate change action,” according to the European Trade Union Confederation.
Some European countries, including Germany, are currently rejecting this reform because, according to the German finance minister, they reject any “weakening of the stability and growth pact,” even though Berlin has been spending lavishly in recent years. to fight crises.
Speaking about the talks to update the fiscal rules, Scholz said on Tuesday: “We need an agreement that is realistic, binding and doesn’t put too much of a burden on member states.”
The debts of EU countries increased after the financial crisis of 2008 and then with the onset of the Covid-19 crisis in 2020, and today they are 150% of GDP in Italy and 110% in France, compared to 66.4% in Germany.
