French and German finance ministers stress common interests in first meeting
Although he is known to be a hardline opponent of public debt, the new German finance minister showed his openness to compromise during his first trip to Paris only days after taking office.
“We don’t always share the same ideas at the start of the process, but the special character of our relationship is defined by our ability to find consensus in the end,” the pro-business liberal Christian Lindner told a press conference.
The French minister of economy and finance Bruno Le Maire welcomed the new German finance minister in Paris for a first exchange. Both were keen to show a good spirit, stressing that they were friends and that cooperation was essential.
Reform of fiscal rules
One of the most important issues for EU finance ministers is the reform of the economic governance framework and the fiscal rules in Europe, which will be debated in the coming year.
The French government has repeatedly called the current fiscal rules obsolete. The EU has currently suspended the Stability and Growth Pact in order to allow fiscal space for governments to react to the pandemic. However, the general escape clause is expected to end after 2022.
In 2023, EU governments will either have new fiscal rules in place or they will have to revert to the old ones mandating public debt not to exceed 60% of GDP and annual budget deficits not to exceed 3% of GDP.
Before the election, the head of the German liberal party (FDP) Christian Lindner was opposed to changing the fiscal rules to provide more flexibility. And even after the new coalition treaty was signed between the social democrats, the greens, and the liberals, his party remained strict on the issue of fiscal discipline.