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Fiscal reform and why it matters for climate

(EurActiv, 18 Oct 2021) The EU’s economic governance must drive climate action for a just transition, not austerity, writes Isabelle Brachet.

Isabelle Brachet is  EU Fiscal Reform Policy Coordinator at CAN Europe.

On 19 October, the European Commission will launch the review of the EU economic governance framework, which includes the common rules limiting Member States’ debt and deficit.

This is a key opportunity to ensure that public spending in Europe better incentivises a just transformation of our economies and societies. It is also a key opportunity to avoid austerity again.

During the recent Week of Debate on Europe’s fiscal future, the Nobel prize winner economist Joseph Stiglitz called out the EU’s set of public finance and fiscal rules, so-called “Stability and Growth Pact” a “Non-Growth and Instability Pact”. It’s time indeed for a deep rethink of the EU economic governance.

Current rules were designed to ensure economic stability in the EU and in the Eurozone, and this remains a valid objective. However, they are definitely not fit to respond to today’s social, economic and environmental challenges.

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EurActiv, 18 Oct 2021: Fiscal reform and why it matters for climate