The EU unveiled an overhaul of its fiscal rules on Wednesday, a long-awaited reform that has bitterly divided member states over how to encourage investment while strengthening scrutiny of government spending.
The European Commission, the EU's executive arm, presented the proposal to simplify the complex rules, known as the Stability and Growth Pact, which limit how much the bloc's 27 member states can borrow.
There will now be months of rancorous negotiations between member states and the European Parliament because different countries want changes for different reasons. The pact currently stipulates that states' public deficits should not go above three percent of gross domestic product, and debt should stay below 60 percent of GDP.
"We simultaneously ensure both equal treatment and consideration of country-specific situations," the EU's economy commissioner, Paolo Gentiloni, told a news conference. It also appeared to try to satisfy Germany with a proposal that says member states must try to reduce their deficit by 0.5 percent per year if it is above three percent of GDP.
That was extended last year to let states raise spending to protect households and businesses from sky-high energy prices after Russia's invasion and to avoid recession.
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