The European Parliament on Tuesday voted to adopt new fiscal rules governing the amount of public debt an EU country can accumulate and the size of a budget deficit permitted.
German EU lawmaker Markus Ferber from the conservative Christian Social Union (CSU) said in a statement the new rules were "a fresh start and a return to fiscal responsibility."
Portuguese EU legislator Margarida Marques from the centre-left Socialist and Democrats (S&D) said the changes allowed for social needs and "provide more room for investment."
The new fiscal rules have two parts. The individual economic condition of each EU country is to be given greater consideration when setting targets to reduce excessive debt and deficits.
At the same time, new fiscal regulations have clear minimum requirements for reducing debt rations for highly indebted countries in the European Union.
Eurostat reported that 13 EU countries had a debt ratio higher than 60% of GDP in 2023. Greece was the highest at 161.9%, Italy at 137.3%, France at 110.6%, Spain at 107.7% and Belgium at 105.2%.
The lowest ratios of government debt to GDP were recorded in Estonia at 19.6%, Bulgaria at 23.1%, Luxembourg at 25.7%, Denmark at 29.3%, Sweden at 31.2% and Lithuania at 38.3%
Previous rules were long considered too complicated and strict for monitoring and enforcing debt requirements.
Now the debt level of an EU member state may not exceed 60% of gross domestic product (GDP).
In addition, the general government deficit - i.e. the gap between income and expenditure of the public budget, which is primarily covered by loans - must be kept below 3% of GDP.
