Flexibility is at a premium. The hottest topic on which Brussels has been discussing for months has so far been shrouded in smoke. Now, finally, a precise definition comes from Jeroen Dijsselbloem. According to the president of the Eurogroup, guaranteeing more flexibility to a country means first of all giving it more time to bring the deficit-GDP ratio back within the limits of 3%, but only in exchange for the structural reforms necessary to improve competitiveness. Flexibility, underlined the Dutchman, "doesn't mean that everything goes well", but that we need to take into account the time it takes for the reforms to take effect.
As regards countries which, like Italy, already respect the threshold of 3% in the deficit/GDP ratio - and are subject to the obligation to further reduce the deficit in order to achieve structural budget balance (MTO, medium-term objective ) –, Dijsselbloem observed that “the OMT includes the element of time, the medium term, as well as the reforms, which require time to take effect. When we make the calculations to determine the OMT for a country, we have to take this into account”.
The number one of the Eurogroup then acknowledged the need to boost public and private investments to restart growth, adding that in some countries “there is room for improving wages and supporting the recovery in demand. We have entered a different phase of the crisis which requires us to focus on growth, with a mix of fiscal policies and the possibility of supporting investments in compliance with the rules".
