Labour MEP: Maltese parliament should carry out Fiscal Pact assessment

Former prime minister and Labour MEP Alfred Sant has called for the Maltese parliament to to discuss and assess the real impact of the EU’s Fiscal Compact, and seek a simplificiation of the pact’s spending rules.

“The Fiscal Pact has not solved long term problems of the eurozone and should be submitted for a new and democratic discussion before it becomes part of the Treaties of the European Union. All local and national representatives across the EU should be invited to carry out an assessment of the real impact of the Fiscal Compact,” Sant told MPs from all over the EU during a discussion on the pact.

The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG or more plainly the Fiscal Stability Treaty is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed in 2012 by all EU members except the Czech Republic, the United Kingdom and Croatia.  In particular, national budget has to be in balance or surplus under the treaty's definition.

Sant said MPs should analyse the compatibility of the goals set out in the Fiscal Compact with other criteria adopted by the EU to boost public investments across the EU, for instance, by exempting net public investment from government deficit calculation.

“Before deciding to include the Fiscal Compact in the EU Treaties, and regardless of such a step, we need to ask ourselves some hard questions. With our national Parliaments, we must create a discussion, a dialogue, about the real significance of the results obtained, the results claimed, for the fiscal compact. Have its rules really been instrumental in saving the eurozone? Are they still relevant today in their existing format?” Sant asked.

The Maltese MEP remarked that the latest autumn forecast of the Commission showed many countries still lagging in terms of debt, deficit and unemployment. “The truth is that it’s not possible to put fiscal policy in a legal straitjacket. Tight rules will be violated as soon as they become too inconvenient. The political environment now is very different to what it was when the fiscal compact was crafted. Today, perhaps because of it, the main democratic challenge to austerity is coming from populism, which has thereby been boosted. Instead of trying to follow blindly the goal of fiscal consolidation, I think a debate should take place around the Fiscal Compact.”