EU proposal on fiscal rules falls short of German requirements -Lindner

BERLIN, April 26 (Reuters) – The European Commission’s proposal for a reform of the bloc’s fiscal rules does not yet satisfy German requirements as significant adjustments are still needed, Finance Minister Christian Lindner said on Wednesday.

“This proposal is the basis for further negotiations,” Lindner said. “We still have a lot of work to do.”

Germany, the European Union’s largest economy, wants the Commission proposal to have numerical benchmarks that lead to a transparent reduction in debt.

The European Commission published on Wednesday its legislative proposal for the new fiscal rules, following a plan published in November that spelled out the Commission’s thinking and gave EU countries the opportunity to give their feedback.

Lindner said he saw some progress in the new proposal of the Commission but that more consultations were needed.

The Commission proposed in November individual debt reduction paths, meaning that it would negotiate a plan to reduce debt with each individual country, instead of implementing one-size-fits-all rules.

Germany does not favour bilateral negotiations between the Commission and individual member states, arguing that tailored rules will mean that not all countries are treated equally, preventing comparisons.

“Germany wants clear rules, with numerical references and benchmarks,” Lindner said.

“Germany would not support a softening of the Stability and Growth Pact. In the future, fiscal rules must even more strongly be the basis for economic stability and growth.”

At a meeting of EU finance ministers in Stockholm on Friday and Saturday, there will be an initial exchange of ideas, but an agreement will still take time, Lindner said.

The main risk is that disagreement could delay the reform beyond the 2024 European [Parliament?] elections.

Mujtaba Rahman, Eurasia Group’s managing director for Europe, forecast a deal before the elections in May 2024, probably in late February or March next year.

Reporting by Maria Martinez, Editing by Friederike Heine

Our Standards: The Thomson Reuters Trust Principles.