Prime Minister Mitsotakis calls for new EU debt targets

Athens Greece’s Prime Minister Kyriakos Mitsotakis is calling for the rules of the EU’s Stability and Growth Pact to be reformed. “We need a new framework that ensures financial sustainability,” said Mitsotakis in an interview with Handelsblatt. At the same time, however, this must ensure that growth is not killed off through “unnecessary austerity”. The prime minister did not specify any specific limit values.

The pact provides for an upper limit on the budget deficit of three percent of gross domestic product (GDP) and a national debt ratio of a maximum of 60 percent of GDP, but was repealed in the corona pandemic. “The current requirements are obsolete,” said Mitsotakis. Among other things, he suggests “treating different types of expenditure differently when calculating the deficit”.

Mitsotakis also advocates turning the more than 720 billion euros EU Development and Resilience Fund (RRF), which is intended to cushion the economic consequences of the pandemic, into a permanent instrument. This is necessary “to finance crucial investments for the future of the EU cheaply”.