European Commission Vice President Valdis Dombrovskis said that the possibility of exempting green investments from EU deficit calculations will form part of discussions when EU budget rules are revised. The idea to exempt investments that would help prevent climate change is to support the bloc’s ambition to cut net CO2 emissions to zero by 2050. The EU officials has pet named such exemption of investments in projects such as the “golden rule”.
Dombrovskis told reporters after a second day of EU finance ministers’ talks in the Slovenian town of Brdo that obviously, the question of a golden rule, in one way or another, will be part of the discussion of the EU fiscal framework. Finance ministers from the 27-nation bloc, during this two-day summit have debated over, how to amend budget rules to better fit changed economic realities once EU budget rules. French Finance Minister Bruno le Maire said that the green exemption idea was worth discussing as it would help to generate the very large funds needed to transform their economies over the upcoming years.
Austrian Finance Minister Gernot Bluemel, expressed concern over how such a rule could be made to work in practice. In defining what constitutes “green” investment, its difficulty persists. He also said that from an economic, scientific point of view, this can make sense. But he had repeatedly seen in the past that such exceptions in budgeting practice. As the idea of a golden rule is nothing new, this is often used as an excuse when the political will lacks to obey the rules. He finally also added that the mechanisms must be built in to ensure that they are not misused. The Bruegel think tank presented this idea of an exemption for green investments. It was done in a paper commissioned the ministers. The paper also suggested the EU’s requirement for governments to cut public debt every year by one-twentieth of the excess over 60% of GDP was too ambitious in a post-pandemic economy.