EU economic governance review - a BusinessEurope position paper

Key messages

• Whilst the immediate concern is for policy-makers to avoid any premature unwinding of measures to support business and workers, in the medium term Member States must return to fiscally sustainable positions.
• Proper enforcement of the Stability and Growth Pact, revised following the conclusion of the ongoing review, preferably with simplified rules and reduced pro-cyclicality and reflecting the post-pandemic context, will be essential to help Member States put their public finances on a sustainable footing and strengthening investment confidence.
• The current low-interest rate environment provides some flexibility regarding the pace at debt levels need to be reduced, provided this is employed wisely by focusing on productive investment and reforms that create fiscal space for future crises.
• Rapid implementation of the EU’s Next Generation EU Recovery instrument is essential. The funds must support investment and reforms that can help transform EU growth, productivity and competitiveness.
• More attention needs to be directed at the quality of investments, with a greater focus on the proportion of Member States’ expenditure towards growth-enhancing expenditures, particularly public investment.
• Deepening Economic and Monetary Union goes hand in hand with strengthening economic governance, including completing the banking and capital markets union and reinforcing the European Semester’s role in increasing growth, competitiveness and convergence.