Economic governance reform: improving credibility, ownership and scope to invest

On Wednesday, MEPs decided to open talks with Council on new economic governance rules, prioritising investment and national ownership and improving the system’s credibility.

The text, adopted by MEPs with 431 votes in favour, 172 against and 4 abstentions, constitutes Parliament’s mandate for negotiations with member states on the final shape of the law, which will start today at 13.00. It replaces the regulation on multilateral budgetary surveillance, the so-called ‘preventive arm of the Stability and Growth Pact’ and contains substantial changes to the Commission’s original proposal. The mandate was prepared by the co-rapporteurs Esther De Lange (EPP, NL) and Margarida Marques (S&D, PT).

Find further information on the negotiation mandate here.


During the debate on Wednesday, Ms De Lange said, “You cannot escape responsibility for tomorrow by escaping it today. The text we are voting on does introduce some room for flexibility, notably to allow for necessary climate investments, but it is also based on sustainable finances to prevent burdening future generations with excessive debt.”

Ms Marques said, “We are proud of our proposal that delivers a strong social dimension, more flexibility in managing debt, and incentives to invest in the EU’s main priorities such as climate, digital, defence, and social sectors. Our priority is now to reach a final agreement in time to avoid reverting to the current and inefficient fiscal rules and to implement a new framework that prevents the return of austerity policies.”


The preventive arm of the Stability and Growth Pact aims to ensure sound budgetary policies over the medium term by setting parameters for member states’ fiscal planning and policies during normal economic times.

Two other texts complete the overhaul of the framework of the EU’s economic governance. The position of the Economic and Monetary Affairs Committee on these texts was, however, not presented to the plenary at this stage since they do not fall under the ordinary legislative procedure and plenary’s consent on them is not required for negotiations with the member states to begin. The other two texts are:

The corrective arm of the Stability and Growth Pact ensures that member states adopt appropriate policy responses to correct excessive deficits (and/or debts) by implementing the Excessive Deficit Procedure (EDP).

The Directive on budgetary frameworks lays down detailed rules for national budgets. These are necessary to ensure EU governments respect the requirements of economic and monetary union and do not run excessive deficits.