New stability pact goes into effect. ‘Yes’ also from the Council. Italy’s green light

Brussels –The reform of the Stability Pact is a done deal. After the European Parliament’s vote, the EU Council also approved the inter-institutional agreement on the new common budget rules, giving the green light it needed to make it effective on a permanent basis. The EU approved the reform within four months.  Economy and Finance Ministers reached the agreement on December 20, with Treasury head Giancarlo Giorgetti overall satisfied with what he negotiated.

Italy obtains that expenditures on reforms necessary for the twin green and digital transition not be considered as penalizing when assessing deficit and debt, and the effect of rising interest rates on the repayment of government bond yields is taken into account.

On February 10, 2024, not even two months after the agreement, in the Council, the inter-institutional agreement between Parliament and the Council itself reached the inter-institutional agreement on the reform of the Stability Pact. Then, the House vote last week, and the final formal but necessary approval today (April 29).

The vote held at the Agriculture Council meeting is notable for the divergence between government and majority. The new Stability Pact does not convince the League, despite the work led by party member Giorgetti. Even Forza Italia does not digest the reform commitments imposed by the revised rules. In the House vote, MEPs from the majority parties (FdI, League, and Fi) abstained, partly to avoid publicly challenging the minister. In the Council, the government kept the point by confirming support for the new pact offered in December.