‘Fiscal Rules now redundant and EU needs to move on’ – Chris MacManus MEP

Sinn Féin MEP Chris MacManus, who sits on the EU Parliament’s Economic and Monetary Affairs Committee, has said the new realities of the Covid and post- Covid economy means the EU must accept that the fiscal rules have lost what little credibility they had and are now redundant. 

MEP MacManus was speaking after the European Fiscal Board stated that: “once exceptional circumstances are behind us, the Stability & Growth Pact will most likely have to be adapted in terms of implementation or legislation or both to reflect new circumstances”. This follows similar calls from the French government last month.

MacManus said:

“The European Fiscal Board’s mandate includes the power to ‘make suggestions for the future evolution of the Union fiscal framework’. It has now come out in favour of reform of the fiscal rules and in particular the debt rule. This echoes Sinn Féin’s continued call for the rules to be indefinitely suspended and ultimately scrapped or deeply and radically reformed.”

“Momentum is clearly building for reform, especially of the debt rule. Whatever logic previously existed for the debt rule now no longer applies, as countries have quite rightly borrowed heavily at zero or very low rates as the pandemic grips the continent with the Euro zone deficit standing at over 8%.”

The Midlands Northwest MEP urged the EU to move on and called for progressive alternatives, “To reintroduce the rules anytime soon would impose incredible hardship. Countries would be forced to start closing this deficit through drastic budget action or be in breach of the rules. Simply put, the rules are now irrelevant and must be suspended to allow for debate on how they must be reformed or scrapped.  There are many progressive alternatives such as a Sustainable Development and Employment Pact that could be developed and examined.”

MacManus concluded, “Sinn Féin have always opposed these rules and as we stated they are especially ruthless when countries are in greatest need. If the EU is serious about not repeating the mistakes of the past it must start by rewriting or throwing out the austerity rule book.” ENDS