France wants the European Stability Pact to also be canceled in 2021

The French finance minister said in an interview published Thursday evening that Paris wants the rules of the European Stability Pact, which 2020, also expired in 2021, given the scale of the Covid-19 crisis.

France hopes that the rules on budgetary discipline between members of the European Union, suspended for 2020 before the Covid-19 crisis, will also be broken next year, says Minister of Finance Bruno Le Maire at Figaro.

“Nothing would be worse than reviving the economic machine while pushing the brake on public spending. This was a mistake made in 2009 and which we will not do again,” Bruno Le Maire said in this interview published Thursday night by the French Daily.

>> Read: The Franco-German couple proposes € 500 billion to revive the European economy

However, the latter did not immediately take on board the proposal of the President of the European Central Bank, Christine Lagarde, who at the beginning of the week called for “modernizing” the Stability and Growth Pact and not put it back as it was before the crisis.

This pact lays down the budgetary rules for the states that have adopted the single European currency – in particular respect for a public deficit of less than 3% of gross domestic product (GDP) in each euro area member state. On March 20, the EU announced the temporary lifting of these budgetary rules, an unprecedented measure given the financial impact of the coronavirus.

Europe “can only be built on solidarity”

Christine Lagarde also welcomed the € 500 billion revival project proposed on Monday by French President Emmanuel Macron and German Chancellor Angela Merkel, which has yet to receive the lubrication from other Union members, some of whom are reluctant.

“Austria, the Netherlands, Sweden, Denmark have expressed their reservations. However, the economies of these states are favored by the internal market: it is therefore in their interest that the economy revives among all their partners in Europe.” , the Minister of Finance appealed.

>> Read: Covid-19: The European Union is preparing for the worst recession since 1929

“This restart depends on the strength of the stimulus plan. Increasing debt jointly is the cheapest instrument, as interest rates are low and we will repay the debt over a long period, over ten years. Therefore, it is the most economical solution,” he added.

“Europe cannot be built on national interests alone; it can only be built on solidarity,” Bruno Le Maire said.

Finally, in the field of taxation, the Minister reiterated his desire for an “international agreement on digital giants, emerging from the crisis, to introduce minimum corporate tax to combat tax optimization and introduce a carbon tax at EU borders”.

With AFP