The last-minute agreement saves the European Commission’s proposed reform of the framework, which aims to slash debt ratios and deficits while maintaining investment in “strategic areas such as digital, green, social or defense,” the Council said.
Under the terms of the agreement member countries will still be required to submit national medium-term fiscal structural plans to the Commission.
Those whose government debt exceeds the limit of 60 percent of gross domestic product, or where the government deficit exceeds 3 percent of GDP, will receive a “reference trajectory” — formerly known as a “technical trajectory” — from the Commission charting out a path to achieve “prudent” debt levels within four years. Governments will be allowed to request an extension of the four-year adjustment period to a maximum of seven years, if they carry out certain reforms and investments, according to the statement.
The provisional agreement must now be approved by the committee of member countries’ permanent representatives in the Council and the Parliament’s economic affairs committee before going through a formal vote in both the Council and the Parliament.