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 Planned since the rules were tightened in 2011, at the height of the
debt crisis, the EU review will focus on whether those changes have
worked and if countries are now coordinating economic policies
better.
The European Commission, which has to complete the review by Dec.
14, can propose changes to the laws in reports sent to EU
governments and the European Parliament. But while the review is
unlikely to lead to changes to the complex set of rules used to
monitor economies and their adherence to targets, it could be
critical at shifting how they are interpreted.
"It's what we have had in mind, an evaluation of the whole
question," Austrian Finance Minister Michael Spindelegger said on
Friday as he enter a monthly meeting of EU ministers, adding that
"the detail and the question whether we need so many rules and
complicated calculations is critical".
The review will also look at whether the rules are helpful in
engendering economic growth and job creation - something Italy,
which takes over the rotating presidency of the EU from July,
questions.
The International Monetary Fund has called for the EU's Stability
and Growth Pact to be simplified and EU Economic and Monetary
Affairs Commissioner Olli Rehn and the chairman of the euro zone's
finance ministers, Jeroen Dijsselbloem, have said there is room to
do so.
Euro zone finance ministers agreed on Thursday that EU budget rules
should not be changed again after major revisions in 2005, 2011 and
2013, but that governments should fully use the leeway already built
into the Stability and Growth Pact.
"The problem isn't changing the rules, the problem is using the
ample margins which already exist in the rules - they are very
complex and there are many ways in which they can be used - to make
them more adapted to the themes of growth and jobs," Italian Finance
Minister Pier Carlo Padoan told reporters.
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Because the review will be tackled by a new European Commission,
which should take office on Nov. 1, the approach to how EU fiscal
rules are interpreted has become a bargaining chip in talks on the
new head of the EU executive.
Italy hasn't yet given its support to leading candidate Jean-Claude
Juncker, seeking a more pro-growth interpretation of the rules.
Without the backing of Italy, Juncker's candidacy might be blocked
by a minority coalition led by Britain.
Any extra leeway with fiscal policy is likely to be closely linked
to structural reforms, Rehn said, and, unlike in the past,
governments may be required to get the reforms under way first
before getting more time to reduce budget shortfalls.
The European Central Bank and the International Monetary Fund urged
euro zone governments to move quickly on reforms to take advantage
of the very low borrowing costs now offered by markets on a wave of
investor optimism and search for yield.
"The window of opportunity is there. Market conditions are
extraordinary, this cannot be taken for granted so action on
structural reform is urgent," European Central Bank policymaker
Benoit Coeure said on Friday.
(Additional reporting by Annika Breidthardt; Writing by Jan
Strupczewski Editing by Jeremy Gaunt; Editing by Jeremy Gaunt)
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