Kaag: possible smooth handling of EU budget rules again | Inland

It would be the second time in a short time that Brussels turns a blind eye to the already not strictly enforced rules for debt and deficits that EU countries are allowed to have. The rules also went overboard during the corona crisis and that could just happen again, Kaag reports to the House of Representatives: “Given the new extraordinary and worrying situation in which the Netherlands and the European Union have found themselves as a result of the terrible developments in Ukraine, it cannot be ruled out that the flexibility of the rules will again be invoked.”

The war in Ukraine also threatens to have serious economic consequences, with rising energy, fuel and food prices. And Western business is also feeling the effects of the sanctions imposed on Russia.

According to Kaag, it is still too early to estimate the magnitude of those consequences and what that means for fiscal compliance: “This will have to be reviewed when there is more clarity about the economic and budgetary impact that this will have. ”

Commitment to the Netherlands

The D66 minister also carefully explains the Dutch commitment to the discussion about the renewal of European budget rules, which will take place in the coming months. In any case, our country wants to stick to the well-known rules of a government debt of no more than 60 percent of national income and a budget deficit of no more than 3 percent per year, standards that, incidentally, southern European countries in particular have not been able to comply for quite some time.

Due to the large debts of those countries, which have only increased during the corona crisis, the Netherlands is willing to look at the rules regarding phasing out. Now the rule of thumb is that a country that is too deep in the red should reduce an average of 1/20th of its debt above the 60 percent standard every year. But that is not feasible for the countries with sky-high debts. The Netherlands is prepared to look at ‘replacement or adjustment’ of that rule.

On the other hand, the Netherlands would like to see better enforcement of European fiscal rules. In addition, Kaag would like to see countries with low debts, such as the Netherlands, also be imposed less strict and detailed fiscal rules. They would be ‘less important’ to them.

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