National Parliaments should discuss the Fiscal Pact - Alfred Sant

Former Prime Minister Alfred Sant said that the Fiscal Pact has not solved long term problems of the Eurozone and should be submitted for a new and democratic discussion before it becomes part of the Treaties of the European Union.

All local and national representatives across the EU should be invited to carry out an assessment of the real impact of the Fiscal Compact, remarked Dr Sant while participating in the discussion on “the Fiscal Compact as part of national economic policy making” during the European Parliamentary Week for 2017.

This event brought together Parliamentarians from all over the European Union to discuss economic, budgetary and social matters with Members of the European Parliament, representatives from the European Commission and the Council, including the Maltese Presidency.

Dr Sant said national representatives across the EU should assess the need for a simplification of the Pact’s expenditure rules. They should analyse the compatibility of the goals set out in the Fiscal Compact with other criteria adopted by the EU to boost public investments across the EU, for instance, by exempting net public investment from government deficit calculation.

“Before deciding to include the Fiscal Compact in the EU Treaties, and regardless of such a step, we need to ask ourselves some hard questions. With our national Parliaments, we must create a discussion, a dialogue, about the real significance of the results obtained, the results claimed, for the fiscal compact. Have its rules really been instrumental in saving the eurozone? Are they still relevant today in their existing format?” asked Dr Sant.

The Maltese MEP said the Fiscal Pact was brokered and signed in a different economic and political context with little public debate and involvement.

“By any measure, the outcomes have not been outstanding. Just consider the latest economic (autumn) forecast of the Commission... with many countries still lagging in terms of debt, deficit and unemployment. The truth is that it’s not possible to put fiscal policy in a legal straight jacket.

“Tight rules will be violated as soon as they become too inconvenient. The political environment now is very different to what it was when the fiscal compact was crafted. Today, perhaps because of it, the main democratic challenge to austerity is coming from populism, which has thereby been boosted.

“Instead of trying to follow blindly the goal of fiscal consolidation, I think a debate should take place around the Fiscal Compact,” said Dr Sant.