French finance minister calls for easing of EU debt rules

France's Finance Minister Bruno Le Maire made a renewed call for European debt rules to be eased, ahead of a meeting of EU finance ministers this week, reported dpa.

"The debt rules must be based on reality, not on dreams," he told the Welt newspaper.

While the Stability and Growth Pact is not completely outdated, the rule on public debt is, Le Maire said.

Many countries in Europe have significantly increased their debt since the start of the pandemic.

"After the crisis, some member states have reached a national debt of 168 per cent, while others have remained at around 60 to 65 per cent," Le Maire said. This gap must be taken into account, he said.

He said member states could be allowed a greater say in how they reduce national debt. European Economic Affairs Commissioner Paolo Gentiloni has already made a proposal along these lines. Other possibilities could be to exclude investments in climate protection or digitalization from the debt rules.

There has been debate for some time about reforming EU debt regulations, not only due to the massive amounts of debt taken on to counter the effects of the pandemic, but also for plans to invest to protect the climate.

The EU's Stability and Growth Pact stipulates that member states may not take on more than 60 per cent of their economic output in debt. Also, budget deficits are capped at 3 per cent of gross domestic product (GDP) under the Maastricht criteria. The pact, however, has been suspended until 2023 due to the high costs associated with the pandemic.