Flexibility to tackle rising prices: the Netherlands rejects Italia’s proposal, citing its high debt levels. Dombrovskis: “We will examine the requests”

The flexibility that Italia (along with Greece) has been clamouring for to combat rising prices – particularly energy costs – has been met with a cool – indeed, frosty – response from the countries of Northern Europe (the Netherlands and Belgium in particular), whilst Spain has shown a willingness to cooperate (despite the rift between Rome and Paris over migrants and the ongoing suspension of the Schengen rules)

“I’m starting to get rather tired of this debate. Every time a problem arises, I always hear the same thing: ‘Let’s change the fiscal rules’. Adding debt to debt only makes the problems worse. We need to spend less and implement reforms. Running away from problems is not the solution’: this is the position of Dutch Finance Minister Eelco Heinen on the calls for fiscal flexibility made by Italia and Greece. Heinen said he was “opposed” to safeguard clauses on energy: “The current rules allow for certain possibilities, but they are temporary.” Afterwards, we must return “into line with the rules”.

“I’m not exactly in favour of changing the budget rules.” Belgium’s Finance Minister, Vincent van Peteghem, also rejected Italy and Greece’s request for greater flexibility to tackle the energy crisis, speaking on the sidelines of the Eurogroup meeting. “If we were to change them,” he continued, “particularly in relation, for example, to current energy prices and bearing in mind that this is primarily a supply shock, I believe that any such intervention must necessarily be temporary in nature.” “I do not think it is a good idea,” van Peteghem continued, “to introduce national safeguard clauses for situations or crises of this kind. Instead, I believe it is essential that, should a decision be taken to proceed in this way, the measure be temporary,” he concluded.

“We will see exactly what the proposal entails, but we are open to considering it. We are waiting to find out the details,” said Spanish Economy Minister Carlos Cuerpo. “I would reiterate that, in my view, two key factors must be borne in mind: the exceptional circumstances we are facing in managing the consequences of the war – which has been affecting the daily lives of citizens across the continent for over seven months – and the need to operate within a framework which, as I have already said, takes into account the sustainability of our public finances,” he added.

Giorgetti himself, at the end of the Eurogroup meeting in Luxembourg, spoke of ‘a wide-ranging debate on the negative impact of inflation on public finances’. According to the minister, the Italian proposal received widespread support, despite the usual reservations of the ‘frugal’ countries. ‘We have asked the Commission,’ says Giorgetti, ‘to give further consideration to the matter with a view to correctly interpreting the factors relevant to compliance with the current Stability Pact. We are confident that sound technical arguments, with the necessary in-depth analysis and appropriate procedures, will lead to a correct interpretation of the rules, including within the energy clause already approved, with decisions consistent with the sustainability of public finances.”