MNI BRIEF: EFB: EC Too Lax In Fiscal Enforcement

The European Commission has been accused of exercising too much discretion in its implementation of the EU's fiscal rules and conducting negotiations with states on their debt plans in an excessively bilateral way. 

In a report publised Wednesday, the European Fiscal Board has also accused Brussels of being too lax in its launch of excessive deficit procedures, citing its decision not to launch an EDP against Spain in 2024 and delaying one against Austria. 

The EFB also refers to a "surveillance gap" as the EC stopped monitoring implementation under the old rules in Spring 2024 and started focusing on the preparation of medium-term debt plans under the new rules even though these were not yet officially in force.  As a result the EU and euro-area’s budget balance proved to be inappropriately expansionary, given economic conditions.