Chaos at the Ecofin Yesterday

The meeting of the Economic and FInancial Affairs (ECOFIN) of the European Union ended in chaos yesterday without reaching a compromise on the reform of fiscal rules (the so-called Stability Pact). The Spanish Finance Minister, the rotating chairman, had forwarded a draft compromise allowing a minimal deficit flexibility, which was backed by France and Italy, but was rejected by Germany, whose Financial Minister Christian Lindner favors a return to rigid fiscal rules. The last chance to reach a compromise is the European Council meeting on Dec. 15. If no text is approved, the pre-Covid stability rules will be back on January 1—unless it is decided to extend their suspension. Either decision will sharpen divisions in the EU.