The EU Commission has been tasked with assessing the financial health of heavily indebted member states, despite calls by Finnish Prime Minister Petteri Orpo and Finance Minister Riikka Purra to avoid monitoring. MEP Nils Torvalds believes that this approach is insufficient and questions why larger member states seem to evade such scrutiny.
The reform of the EU’s financial rules was recently approved by the European Parliament after years of work on the Stability and Growth Pact. The negotiators reached a preliminary agreement in February, which was now approved by the Parliament. The reform maintains acceptable debt and deficit levels for EU countries but aims to simplify and improve compliance with the rules. Each member country will have a net spending path prepared by the EU Commission based on structural factors. There are different rules for how quickly debt must be reduced based on the debt ratio. If debt exceeds 90 percent of GDP, it must be reduced by one percentage point annually. Countries with 60–90 percent debt ratio have a lower adjustment rate of 0.5 percentage points.
Finish Prime Minister Petteri Orpo and Finance Minister Riikka Purra have emphasized the importance of avoiding EU monitoring, arguing that it would only create additional burdens for already struggling member states. However, MEP Nils Torvalds is skeptical about this approach, as he believes that larger member states should be held to higher standards of accountability than smaller ones. He argues that if member countries are allowed to continue down their current paths without oversight, they may end up facing even greater financial difficulties in the future.
The public debt to GDP ratio was highest in Greece at 166 percent in the third quarter of 2023. Other countries with high debt ratios include Italy, France, Spain, Belgium, and Portugal. Eero Heinäluoma, leader of the Social Democrats, is pleased with the new financial rules and believes they provide a more realistic and acceptable path for member states to follow