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New EU fiscal framework needed for a new world

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Civil society groups convene to connect people, policymakers, academics

Fiscal framework not fit for purpose, needs to build social, environmental and economic resilience

Comes as German election occurs this week

BRUSSELS, 20 September 2021 As we emerge from the shock of the Covid-19 pandemic, the challenges ahead are huge: global public health, climate change, biodiversity loss, inequalities, gender equality and social cohesion. We must seize new opportunities to build long term resilience.

The review of the fiscal rules is now on the agenda of the European Commission. A coalition of civil society groups meeting this week see a pressing need for people to be fully informed about – and have a say in – fiscal policy.

A four-day event takes place next week under the banner Fiscal Matters that aims to take the first step by opening up a vital debate on Europe’s future to everyone. Discussion and debate will swirl across Europe from September 27 to 30 on the future of EU fiscal policy. With 20 panel discussions running online across four days, Fiscal Matters will highlight a wide range of perspectives, present recent academic work, and connect people who recognise the importance of fiscal policy in our shared future.

Fiscal Matters brings together civil society organisations, think tanks and trade unions, including: the European Trade Union Confederation, the European Environmental Bureau, the European Youth Forum, Climate Action Network Europe, Finance Watch, New Economics Foundation, Greentervention, Sustainable Finance Lab, the Fondation Nicolas Hulot and the ZOE Institute for Future-fit Economies.

Benoit Lallemand, from Fiscal Matters organiser Finance Watch, said: “As academics, civil society, trade union leaders, activists and citizens, the coalition demands an overhaul of the current EU fiscal framework that prioritises debt reduction and balanced budgets over tackling long-term risks and challenges. We need to prioritise important human, economic and environmental outcomes – such as creating well paid green jobs, lifting millions out of poverty, and implementing much needed sustainable infrastructure projects – as the backbone of tomorrow’s prosperity.”

Fiscal framework handcuff growth, crippling eurozone

The existing fiscal framework governing debts and deficits in Europe have constrained Europe’s economic growth for decades, and are not fit for purpose in the post-pandemic world. If reform is not achieved before 2023, a return to ill-timed budgetary cuts will cripple the eurozone.

Europe needs a fiscal framework that is fit for purpose in a post-pandemic world. A unique opportunity presents itself to do things differently and open a new chapter of European fiscal policy, securing a fiscal framework that enables social and environmental resilience.

Wendel Trio, Director of Climate Action Network (CAN), a Fiscal Matters coalition partner, added: “The European Commission’s expected review of the EU fiscal rules could significantly increase Member States’ capacity to invest in climate action and accelerate the just transformation away from fossil fuels. However, in order to have a fiscal policy that works for all, it is important to develop the new fiscal rules in a participatory and transparent way. The week of debate on Europe’s fiscal future aims to provide this space for public discussion.”

Michael Vincent, President of Greentervention, a Fiscal Matters coalition partner, noted: “The world and the challenges ahead have radically changed since the Stability and Growth Pact was concluded 1997. We need a Sustainability and Transformation Pact now. Let’s start to discuss its contour at #Fiscalmatters because the overarching principle of public policy should be the sustainability of the planet and its hospitality, not outdated debt ratio limits.”

Lallemand, who serves as Secretary General of Finance Watch, concluded: “As Europe emerges from the Covid-19 pandemic, we can choose to go back to the old rules that led to a decade of underinvestment, or we can create a new frame for a new world. Join us for a week of debate.”

See the Fiscal Matters website at www.fiscalmatters.eu

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