World News | EU launches sweeping overhaul of euro rules in response to pandemic and war fallout

BRUSSELS, April 26 (AP) — The European Union moved Wednesday to overhaul rules on its single currency, the euro, as the 27-nation bloc’s economies struggle under high debt from the COVID-19 pandemic and the fallout from Russia’s war in Ukraine. comprehensive reform.

“Our common EU fiscal rules date back to the 1990s and we have weathered major economic shocks since then,” said European Commission Vice-President Valdis Dombrovskis. “We now face different challenges and economic priorities, and our rules need to reflect those changes.”

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A central pillar of the sweeping reforms, drawn up by the EU’s executive branch committee, is for member states to design and present plans outlining their fiscal targets, measures they might use to address any imbalances, and the main reforms and investments they intend to make.

The main objectives of the old Stability and Growth Pact will remain, although those rules were largely suspended in 2020 following the outbreak of COVID-19. Countries must commit to keeping government deficits close to or below 3% of GDP and keeping public debt below 60% of GDP.

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Individual national plans will cover at least four years and must be approved by the Commission and other EU member states.

If a country fails to meet its target, the committee will issue recommendations on a “technical trajectory” aimed at ensuring debt reduction and restoring the deficit to a maximum of 3% of GDP.

The goal is to ensure that the debt is reduced by 0.5% per annum and continues to decline over the long term. The committee would allow “exemption clauses” in exceptional circumstances, such as a resurgence of the pandemic or an extended war in Europe, where national plans would become too onerous.

EU member states and the European Parliament must now take a closer look at the proposals. The committee insisted that reform was an “urgent priority” and urged all parties to agree on the plan “as soon as possible” to adequately meet the challenges ahead. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)