Reform of the EU economic governance framework

ECON-VII/030

Reform of the EU economic governance framework

Elio DI RUPO
Elio DI RUPO
Member
Minister-President of the Government of Wallonia
 ariane.fontenelle@gov.wallonie.be
,
 j.bricq@wbi.be
 +32 81 331365
 FR - EN
Commissions: ECON-VII , COTER-VII
 Adoption: 10/10/2023
The main objective of this opinion is to strengthen public debt sustainability while also promoting sustainable and inclusive growth and facilitating public investments and reforms, particularly in the green and digital transitions.

The opinion seeks to strengthen national ownership for Member States and recognise country specific regional and national situations.

The CoR supports the principle of a possible extension to the fiscal adjustment period in specific cases including for investments and reforms aimed at promoting economic, social and territorial cohesion; the UN SDGs; the EU Green Deal; and the digital transition.

The CoR supports allowing specific treatment for national or regional co-financing of projects funded by the EU, for example projects related to cohesion.
At the Plenary debate for this opinion on 10 October 2023, guest speaker MEP Margarida Marques (co-rapporteur for the EP report on economic governance reform together with Esther de Lange) highlighted her good cooperation and discussions with the CoR rapporteur, stressing that this had strongly influenced her own report. She recognised the local and regional relevance of this reform and stated that many of the EP's priorities are in line with that of the CoR, particularly in terms of facilitating public investments and reforms in the green and digital transitions.

Importantly, the draft report of Ms Marques and Ms De Lange (PR(2023)754668) proposes to amend the Commission's proposal as regards the definition of next expenditure, notably adding an exclusion for expenditure on co-financing of programs funded by the EU (capped at 0.25% of GDP). It is scheduled for adoption in the ECON committee in November 2023.
THE EUROPEAN COMMITTEE OF THE REGIONS
- considers the reform of the EU's economic governance framework inevitable given the impacts of the COVID-19 crisis and Russia's invasion of Ukraine, and given the need to encourage public investment to help achieve the EU's commitments when it comes to the green and digital transitions;
- recalls that local and regional authorities (LRAs) are on the frontline for dealing with these multiple challenges, and are responsible for more than half of public investment in Europe;
- supports the principle of a possible extension to the fiscal adjustment period in specific cases and believes that investments and reforms aimed at promoting economic, social and territorial cohesion and achieving the UN Sustainable Development Goals, and at implementing the EU Green Deal and the digital transition, could be reasons for allowing such an extension for a limited amount of time;
- recalls that expenditure under co-financing is, by definition, essential for the implementation of EU priorities – the European Green Deal, economic, social and territorial cohesion, the Sustainable Development Goals, the European Pillar of Social Rights and the 2030 Policy Programme 'Path to the Digital Decade'. Granting this expenditure favourable treatment within the financial framework would boost the overall coherence of European policies.
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