The new EU economic governance rules, which come into force this year, are a positive development for Greece as they meet long-standing ambitions of the country, such as the special treatment of defence spending in the deficit calculation, and ensure that fiscal stability does not undermine growth. Greece is adamant about continuing on the path of fiscal responsibility despite the new regulations because we want to do so with the support of markets, investors, and rating agencies and because the sacrifices made by citizens in previous years must not go in vain.

Kostis Hatzidakis, the Minister of Economy and Finance, brought this up today in Parliament when he briefed the members of the Standing Committees on European and Economic Affairs on the status of the negotiations on the reform of the European Union's economic governance framework.

The new rules seem to have already been agreed upon between the Council of Ministers and the European Parliament and are awaiting formal adoption by the European Parliament plenary in April. This means that the 2025 national budgets will be governed by the new framework, replacing the current rules, the implementation of which, as Hatzidakis explained, would impose very high and unrealistic debt reduction requirements for several member states - for Greece, for example, it would mean an annual debt reduction of 4.5%-5% in the coming years.

At the same time, he stressed, the new situation after the pandemic and the invasion of Ukraine, the dual green and digital transition, and the need to close the widening competitiveness gap with other major economies forced us to look at the issue of defence spending and public investment in a different light.

THE GREEK POSITION

The Greek negotiating position was based on the assumption that the objectives of fiscal stability and economic growth are interrelated and complementary. "We sought an agreement that would ensure deficit and public debt containment at the European level, but without imposing excessive and rigid constraints that would threaten the recovery of the European economy and possibly harm long-term growth. We said: Yes to clear and serious fiscal rules, no straitjacket," Hatzidakis said. Under the new framework, the basic projections for the fiscal deficit (3% of GDP) and public debt (60% of GDP) remain unchanged, but there are significant changes in the preventive and corrective arms, which can be categorized along 5 axes.