A return to the traditional EU fiscal parameters, known as Maastricht criteria, setting member states’ maximum deficit and debt levels to three per cent and 60 per cent of GDP was unlikely, according to Spanish MEP Eider Gardiazabal Rubial.

The Socialist MEP, who is a rapporteur for the draft report on the implementation of the Recovery and Resilience Facility, said during a webinar hosted by the European Parliament that following the COVID-19 pandemic and with the recent invasion of Ukraine, returning to the “golden figures” of three per cent and 60 per cent was “completely out of reality”.

She called for the identification of flexible ways to manage the debt which many member states accumulated throughout the two-year pandemic.

Gardiazabal Rubial expressed hope that member states’ governments and EU institutions have learnt the lessons from 2008, where the insistence on meeting stringent fiscal criteria resulted in prolonging the economic crisis of the time.

Siegfried Muresan, a Romanian MEP from the centre-right EPP group, appeared to share her views, suggesting that although fiscal stability rules are “a good thing and should be respected”, the suspension of fiscal rules might be prolonged further given the current circumstances.

“We have to manage debt with big caution,” the MEP explained, adding that “we need to understand the impact of the new crisis on our economy”.

In 2020, the government deficit of both the euro area and the EU increased significantly compared with 2019, as did the government debt, in the context of the measures undertaken in response to the COVID-19 pandemic.

Eurostat data shows that in the euro area the government deficit to GDP ratio rose from 0.6 per cent in 2019 to 7.2 per cent in 2020, and in the EU from 0.5 per cent to 6.9 per cent. In the euro area the government debt to GDP ratio increased from 83.6 per cent at the end of 2019 to 97.3 per cent at the end of 2020, and in the EU from 77.2 per cent to 90.1 per cent.

This article is part of a content series called Ewropej. This is a multi-media house initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.