As EU plans for subsidising the green transition could coincide with discussions over fiscal rules reforms at the end of March, the timing provides an opportunity for a package deal, according to our Deputy Director.
However, “everything is still on the table”, Nils Redeker said in the interview with EURACTIV.
EU leaders left the issue of how exactly a balance could be found between loosening state and rules and risking the fragmentation of the single market for their meetings on 23 and 24 March 2023. Simultaneously, European governments are under pressure to agree on new fiscal rules.
“Germany now enters the debate on fiscal rules in a situation where it is itself asking for more legroom for national subsidies,” Redeker said, arguing that both issues were very likely to be linked. However, a compromise deal that would make both fiscal rules and state aid rules more flexible would not be enough, according to Redeker.
“Even if all member states were allowed to spend more money, there are large differences in the fiscal space that is available to them,” he said. To maintain the level playing field, a European solution to counter the fragmentation risks of the loosened state aid rules is therefore still necessary.
“EU leaders will have to give a clear signal in all three areas,” Redeker said.
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