EU finance ministers agree on new fiscal rules

European Union (EU) finance ministers reached a consensus on Wednesday regarding new budget regulations following compromises between the two factions led by France and Germany within the bloc, reported Xinhua.

The established targets of a maximum 60 percent debt-to-GDP ratio and a maximum 3 percent deficit remain unchanged. However, modifications have been introduced to permit EU members to gradually reduce deficits and debts from 2025 over four to seven years.

Countries may opt for longer terms if they undertake reforms and investments aligned with EU priorities.

The Spanish government, currently holding the rotating EU presidency, lauded the deal as a "historic landmark" in a post on social media platform X, formerly known as Twitter.

It emphasized that the new economic governance framework ensures both stability and growth, with rules that are "balanced, realistic, fit for present and future challenges."

Dutch Finance Minister Sigrid Kaag said that the agreement is conducive to reforms and investments.

"This agreement stimulates reforms, allowing for the right investments tailored to the situation of individual countries," she said.

The EU's previous budget regulations had been put on hold since the onset of the COVID-19 pandemic, allowing governments to increase spending in the wake of the recession. The suspension of the rules is set to end next year.