The Communication adopted today will involve Member States' Governments and Parliaments. It will also involve the European Parliament, the European Central Bank, other institutions, stakeholders and social partners.
So we will have a few months of discussion on this issue. I really hope that we will have a constructive and results-oriented discussion, because this is what we need.
As Valdis said, the discussion is first of all on how the rules were functioning in the last 10 years. I think that it is fair to say that we had good results on reducing deficits and on better coordinating our fiscal policies. We have now a timeframe to discuss draft budgetary plans and we can count on a process of consultation with Member States which is very useful.
We had mixed results on the reduction of debt. Because overall the debt was reduced, in the EU it is now under 80%. If we consider other global players, we see that the US has 115% of debt and Japan 237% of debt. But this was not an overall reduction. We still have countries with a very high level of debt and the risk is to consolidate different situations among different groups of countries, with high debt and low debt and this stabilisation is not good.
We had also mixed results because of the complexity of our rules. We have to consider the fact that complexity is also a form of intelligence. So it could be useful complexity in order to have a flexible, intelligent reaction to crises, but complexity is also difficult to manage and is controversial. So we have to work on this.
And then we had shortcomings. For sure, we were not able to have an anti-cyclical set of rules. And we were not able to increase the rate of public investment, which has in fact decreased in the last 10 years.
Now, we are in very different times. 10 years ago, we had a deep crisis. Then as Valdis reminded us, stable growth for several years but now this growth is slowing down. So this is the framework surrounding us. I would say the key word for our situation today is ‘uncertainty'.
We will have our Winter Forecast next week, but for sure we had good signs from our economy last year but also negative results in the fourth quarter. So, internal situation with difficulties, and external challenges: trade, discussions on Brexit and coronavirus are elements that could have economic consequences that we still cannot asses seriously. But we know that these are challenges.
So, the targets of the review that we are launching are very clear.
One, the main one, is to preserve stability, tackling high debt and macroeconomic imbalances without changing our Treaties.
Second, to relaunch growth. We have to avoid a sort of “low for long” - low inflation, low interest rates, low growth for too many years - and we have to avoid that only monetary policy is asked to face this low for long situation.
Third, we have to face the enormous challenge of the amount of investment needed for the environmental transition.
So, we put on the table through this Communication a certain number of questions. Nine questions, I will not repeat them all but I would mention a few of them:
How to better ensure sustainable public finances and tackle macroeconomic imbalances?
How to avoid pro cyclical policies?
How to support growth-friendly public finances and incentivise reforms and investment?
How to make the framework simpler and more transparent?
How to make the framework more focused on “gross errors”?
I think we need first ambition in this discussion; second, an extraordinary effort to bridge differences because to follow differences brings us nowhere.
This is not a technical exercise. This is something dealing with jobs, well-being and protection of our communities. So as Valdis was saying, we will have this public debate with an effort to have a common vision and avoid divisions.