EU’s new fiscal rules too strict for ‘fight’ against climate change? Churchill analogy invoked

The Greens claimed the new rules are ‘suicidal’ (which could also be said of the proposed spending plans), and imagined bean counters telling Churchill to give up because his World War costs were unaffordable. Climate hysteria rumbles on in its own world.
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The new EU rules for national debts and deficit would hamper member states’ ability to make the public investments needed to effectively combat climate change, a new study commissioned by the Greens/EFA group in the European Parliament found.

Speaking at a press briefing on Tuesday (30 January), Philippe Lamberts, co-president of the Greens/EFA group, stressed that the fiscal rules currently being negotiated in ‘trilogue’ discussions between the European Commission, Parliament, and Council would render it “legally impossible” for the bloc to achieve its goal of full decarbonisation by 2050, reports Euractiv.

Echoing earlier comments, he accused the EU of being run by “religious fundamentalists” following “suicidal” policies.

The rules, which European trade unions have vehemently condemned, include individual ‘expenditure paths’ for each EU country to reduce debt and deficits to the limits given in the EU treaties.

As proposed by EU countries’ finance ministers, they would also require member states with public debt-to-GDP ratios above 90% to reduce their debt burden by one percentage point on average per year, while EU countries with debt-to-annual GDP ratios between 60% and 90% cut their debt ratios by 0.5 percentage points on average annually.

Thirteen of the EU’s 27 member states currently have debt-to-annual GDP ratios above the 60% target set in the ‘Stability and Growth Pact’, the previous set of budget rules; the EU’s total debt-to-annual GDP ratio is 83.5%.

However, according to a new study by the Rousseau Institute, a French think tank commissioned by the Greens/EFA group, member states will almost certainly have to issue substantially more debt to finance the green transition over the next quarter-century.

In particular, the report found that additional public investments worth €260 billion per year, or 1.6% of Europe’s annual GDP, are needed for the bloc to reach its net-zero objective by 2050. The study added that extra private investments amounting to €100 billion per year will also be required.
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During the briefing, Lamberts made repeated historical analogies to the present moment.

At one point, he reiterated a claim made earlier this month in comments to Euractiv and EUObsever that the EU’s current leaders resemble the “sleepwalkers” who led “Europe into the abyss” of the First World War.

At another, he compared the fight against climate change to the Allies’ efforts to defeat Nazi Germany during the Second World War – and highlighted the absurdity of policymakers adhering to fiscal strictures when confronted with challenges of existential significance.

“Just imagine that this discussion would have happened under the constraint of the European fiscal rules,” he said.

“Well, the Chancellor of the Exchequer would have gone to Churchill saying, well, you know, as much as you may like to continue the fight, you have to give up because of fiscal rules [even though] it is vital, vital for societies, vital for the economy, vital for the future. Sorry, but you cannot look at reality with the eyes of [an] ideologically blinded accountant.”

Full report here.