The European Union should consider carbon emissions and defense expenditure part of debt calculations as the bloc discusses easing budgetary rules, a senior EU official said.
(Bloomberg) — The European Union should consider carbon emissions and defense expenditure part of debt calculations as the bloc discusses easing budgetary rules, a senior EU official said.
Thierry Breton, commissioner for industry, said according to the prepared text of a speech Monday at the Eindhoven University of Technology that “the real whole picture of debt” is quite different if pollution and investments made in national armies are factored in. Both issues top the bloc’s priority list following Russia’s invasion of Ukraine and amid spiking energy prices.
“The notion of virtue is therefore very subjective — and indeed not very representative of the efforts made by member states if one takes a broad spectrum of policies,” Breton said.
EU finance ministers meeting in Prague later this week will discuss a review of the Stability and Growth Pact, the EU’s fiscal rules that limit national spending, ahead of a proposal from the European Commission expected this autumn to reform the framework.
Member states remain split over how far the EU should go in loosening budgetary constraints to support expenditure needed to rearm Europe, bolster its energy independence or support its citizens battling price hikes.
Breton, a former French finance minister, said there should be no taboos in the debate about the fiscal rules as the bloc needs massive investments. “Budgetary virtue cannot be the alpha and omega of our common project,” he added.
The International Monetary Fund proposed Monday to create a permanent joint fund for common goods including energy security financed by common debt, similar to the temporary recovery fund set up by EU members in the aftermath of the Covid-19 pandemic.
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