Fresh attempt to change Eurozone’s rules

Later Monday, the European Commission will officially start consultation and discussion on whether and how to reform the Eurozone’s fiscal rules.

Over the past 20 years the Stability and Growth Pact (SGP) has been one of the most contentious pillars of the monetary union. Despite all current shortages in the global economy, there is clearly no shortage of ideas and proposals of how to improve the fiscal rules

While the debt criterion of 60% of GDP hardly ever proved to be useful or applied, the 3% GDP deficit criterion had become a powerful policy anchor; at least in economic ‘normal’ times.

Later today, the European Commission will present possible ways forward for the SGP and will start a public consultation process. This process will follow the principles of the ECB’s public consultations as part of the strategy review.