Defence, Dombrovskis: “If there will be a suspension of stability pact, it will be for more than one year”

Brussels – If the EU really were to suspend the Stability Pact to allow funding for revitalising the defence sector, “it would be for more than a year”. The Economy Commissioner, Valdis Dombrovskis, does not get out of line but at least makes something clear. At the end of the Ecofin Council proceedings, he returns to the idea of activating the safeguard clause and freezing the budget rules, pointing out that in the Commission, “work is being done to figure out how to use the additional flexibility” that “some time is still needed” to finalise the proposals, but in any case, he adds, should this be done it will be for more than a year.

“We need to develop our industrial and production capacity, and this does not happen in one year,” Dombrovskis continued. That is why the idea is to freeze the rules for over a year and give certainty and answers to the industry and markets. The latter, however, will also look at the stability and soundness of public finances. On this, the Economy Commissioner wants to assure and reassure: “We are not reviewing the rules because we have already reviewed them.” In a nutshell, the stability pact, as already reformed, must not change.

The Commission will have to make the appropriate proposals, expected in “the coming weeks,” Dombrovskis continues, and then it will be up to the member states to decide whether or not to approve what comes to the table. In this particular case, it will have to be seen whether all governments will agree to suspend the rules of the Stability Pact again, in different ways depending on the debt situation of different countries. For Andrzej Domański, Poland’s finance minister and president-in-office of the Ecofin Council, it is a possibility. “All options are on the table,” he said at the end of the proceedings. “There are no taboos, but a pragmatic approach is needed.”