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Commission relaunches the review of EU economic governance

The European Commission recently (19 October 2021) adopted a Communication that takes stock of the changed circumstances for economic governance in the aftermath of the COVID-19 crisis and relaunches the public debate on the review of the EU's economic governance framework. The Communication follows President von der Leyen's commitment in the State of the Union address to build a consensus on the future of the EU's economic governance framework. The Commission had previously suspended this public debate, which was first launched in February 2020, to focus on responding to the economic and social impact of the COVID-19 pandemic.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, recently said:

Europe is now sailing into calmer waters after the turbulence of the pandemic. Thanks to our coordinated and assertive response, we are now exceeding growth expectations. But the crisis has also made some challenges more visible: higher deficits and debt, wider divergences and inequalities and a need for more investment. We need economic governance rules that can tackle those challenges head-on. So today, we are launching a public debate. We want to hear views and ideas, and build consensus and ownership for effective economic surveillance. That way, we can make our societies and economies more sustainable, fair and competitive – and fully prepared for future challenges.”

Paolo Gentiloni, Commissioner for Economy, recently said:

“After last year's unprecedented shock, Europe's economy is recovering strongly. Now we need to ensure that our future growth is both sustained and sustainable. We are relaunching this review of our economic governance against a backdrop of enormous investment needs, as the climate emergency becomes more acute with every passing year. At the same time, the powerful fiscal support provided during the pandemic has led to higher debt levels. These challenges make it all the more essential to have a transparent and effective fiscal framework. Achieving this is our joint responsibility and is crucial to the future of our Union.”

The relaunched debate will draw on both the Commission's view of the effectiveness of the economic surveillance framework presented in February 2020 and the lessons learnt from the COVID-19 crisis described in the recent Communication. The Commission invites all key stakeholders to engage in this public debate so as to build consensus on the future of the economic governance framework. It is crucial to have in place a framework that can fully support Member States to repair the economic and social impact of the COVID-19 pandemic and respond to the EU's most pressing challenges.

The Commission will consider all views expressed during this public debate. It will, in the first quarter of 2022, provide guidance for fiscal policy for the period ahead, with the purpose of facilitating the coordination of fiscal policies and the preparation of Member States' Stability and Convergence Programmes. This guidance will reflect the global economic situation, the specific situation of each Member State and the discussion on the economic governance framework. The Commission will provide orientations on possible changes to the economic governance framework with the objective of achieving a broad-based consensus on the way forward well in time for 2023.

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