In the EU there is resistance to the European Commission's planned relaxation of the EU Stability Pact.

Before the meeting of EU finance ministers on Thursday and Friday, Austrian finance minister Gernot Blümel called on several member states to form an "alliance" of states that gave priority to sound financial policy and sustainable public finances.

"Our primary goal must be to lower the high debt ratios again in the medium and long term," wrote Blümel in a letter to several ministers.

Werner Mussler

Business correspondent in Brussels.

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    In the beginning discussion about reforming the Pact, he recognizes that there are too many proposals that fundamentally call into question a budget framework based on general rules.

    That worries him, writes Blümel.

    Although the previous rules have already been violated too often, their existence after the euro and before the Corona crisis ensured that the debt ratio in the EU fell by an average of eight percentage points between 2014 and 2019.

    Last year it rose by around 20 points;

    in Greece, Italy, Portugal, Spain, France, Belgium and Cyprus, the quota is likely to be over 100 percent of gross domestic product.

    It is all the more necessary to tackle a debt reduction again, writes Blümel.

    Old criteria outdated?

    The EU Commission intends to present proposals in the autumn to overcome the “rigid” orientation towards the Maastricht debt rules (3 percent of GDP for new borrowing, 60 percent for the debt ratio). In the EU authorities, the opinion is often expressed that the “old” criteria are outdated, not least because of the current low interest rates. The Austrian minister apparently wants to prevent the discussion about the future budgetary direction of the EU from being determined by the Commission's plans.

    Blümel is particularly hoping for support from the “northern” countries. The governments of the two largest states in this group reacted cautiously. The Netherlands, whose government is only executive, should not join because the potential coalition partners of a new government are very different on the issue. The Federal Government points out that Finance Minister Olaf Scholz (SPD) has spoken out against a fundamental reform of the pact on several occasions. Blümel's concerns are hardly disputed in the matter, said an EU diplomat. His initiative at the present time appears to be more of a diversionary maneuver from Blumel's domestic political difficulties.