European Union lawmakers on Tuesday approved a reform of the bloc’s budgetary rules aimed at reigning in spending.
Brussels has spent two years negotiating the reform.
The new rules still need to be endorsed by the bloc’s 27 member states. Member state negotiators gave provisional approval in February after talks with lawmakers.
The new rules stipulate that a state’s debt must not go beyond 60% of GDP and its public deficit must stay below 3%.
Countries with debt at over 90% of GDP will be required to reduce it by 1% per year on average and by 0.5% when it is between 60 and 90%.
The new rules would make it more difficult for the EU Commission to launch procedures against countries with excessive deficits if essential investments are ongoing. National expenditure on the co-financing of EU-funded programs will be excluded from spending calculations.
The reform also allows member states with excessive deficits or debt to request a discussion process with the Commission.
Previous budgetary regulations under the Stability and Growth Pact were suspended between 2020 and 2023 to help EU member states deal with the economic consequences of the COVID-19 pandemic and Russia’s war in Ukraine.
Negotiations on the new budgetary rules saw fierce debate on how much limits should be relaxed to give more room for investment.
