New rules to be more flexible
The new financial rules proposed by the European Commission on Wednesday put Greece and the rest of the European Union in a new framework of fiscal discipline as of 2025, with greater flexibility in terms of the rate of reduction of public debt compared to the existing rules, along with reform requirements.
The proposals for the new economic governance framework were accepted in principle with satisfaction in Athens, since, as competent sources state, “they have as a cornerstone the approach of each member-state with flexibility in order to determine the path of its fiscal adjustment, depending on the conditions that prevail in it. It does not require an aggressive, suffocating treatment, but a gradual and consistent approach.”
Greece and the other states with debt over 60% of gross domestic product will be required to reduce their debt after four years, but the size of the reduction will be agreed with the Commission, based on a debt sustainability analysis for each member-state.
For Greece, analysts report, it is estimated that a rate of debt reduction corresponding to a primary surplus of around 2% of GDP will be needed.
