"The Council adopted today three legislative acts that will reform the EU's economic and budgetary governance framework. The main objective of the reform is to ensure sound and sustainable public finances, while promoting sustainable and inclusive growth in all Member States through reforms and investments", the institution that brings together the Member States said in a statement.

According to the body, "the new legislation will significantly improve the current framework and provide effective rules" as it will safeguard "sound and sustainable public finances, with a stronger focus on structural reforms and investments to boost growth and job creation across the EU".

"It is now time to implement them swiftly", appeals the Council of the EU.

What changes? 

Last Tuesday, the European Parliament had given its final 'green light' to the new EU budget rules, for deficit and public debt, clearly approving three pieces of legislation in the last plenary session of the current legislature, in the French city of Strasbourg.

A European source explained to Lusa that, after these final approvals by MEPs and the countries, the legislative package will be published on Tuesday in the Official Journal of the EU to enter into force on the same day.

Until this Tuesday, the EU countries (including Portugal) had to send simplified versions of their Stability Programmes to Brussels, but, as the new European budget rules come into force in the meantime, this deadline no longer exists and the countries will have more time, until September, to submit a national plan to the European Commission.

These will be the new national budgetary-structural plans (they will no longer be called national reform and stability programmes) and will include measures to correct macroeconomic imbalances and guidelines on priority reforms and investments for four or seven years.

The EU's budget rules were suspended following the covid-19 pandemic, to allow Member States to deal with the crisis, and there was then a consensus on the need to review and update the legislation on economic governance before the Stability and Growth Pact, originally created in the late 1990s and already considered 'outdated', was resumed.

The European Commission presented a proposal in April last year, composed of three legislative acts.

At issue is the planned resumption of these budget rules after the suspension due to the covid-19 pandemic and the war in Ukraine, with a new formulation, despite the usual ceilings of 60% of Gross Domestic Product (GDP) for public debt and 3% of GDP for the deficit.

Debt is expected to decrease by at least one percentage point per year for countries with a debt ratio above 90% of GDP (as is the case with Portugal) and by half a percentage point for those between this ceiling and the level of 60% of GDP.

It will be up to the Member States to prepare their national plans, which the European Commission will assess, setting a period of at least four years for the debt to be put on a downward trajectory, with this period being able to be seven years in the face of reforms and investments (such as those included in the Recovery and Resilience Plans).

An annual public spending ceiling will be introduced for maximum deviation.

Defaulting countries may incur excessive deficit procedures and fines.

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