Germany wants more strict EU debt rules

BERLIN Reuters - Germany wants EU rules on member states' debt to be enforced more rigorously, government sources said on Friday, setting out reforms sought by Berlin.

The rules must be defined more clearly instead of setting unattainable goals that are open to interpretation, a government source said in Berlin.

The German government wants to take a leading role in discussions on reforming the 27 member bloc's debt rules, pointing out recommendations by the International Monetary Fund, the OECD and the European Commission to rein in spending, as well as to reduce deficits that went up sharply during the coronaviruses epidemic.

The EU rules limit debt to 3% of economic output and to 60% of total debt, but they are suspended because of the Pandemic.

Finance Minister Christian Lindner said that the EU member states should keep their annual deficit below 0.5% of economic output or at least move towards that target.

My proposal aims to make these medium-term budget targets binding, he said in comments to the Handelsblatt newspaper published on Thursday.

A document seen by Reuters stating Berlin's proposals, but also highlighting the importance of continued investment for growth and climate goals, made it all the more necessary to improve the state of public finances.