The European Parliament on April 23 rubber-stamped the new version of the so-called “Stability Pact,” which disciplines fiscal policies of EU member states. The old fiscal rules had been lifted under the pandemic and have been replaced by new rules, which are officially “softer” because they allow exceptions to balanced budgets, but those exceptions are paid for dearly in terms of a loss of sovereignty. The reformed Pact forces high-debt countries to implement a four-year plan (that can be stretched to seven years in particular cases) to balance the budget. For countries with a debt over 90% of GDP (such as Italy), a yearly spending cut equivalent to 1% of GDP is mandatory.
Although the Italian government had approved the reformed Pact at the EU Council meeting, no Italian party, including the government majority ones, voted for it at the European Parliament yesterday. They all abstained, with the M5S voting against it.
