Member states face billions of euros in expenses for assisting refugees arriving in Europe. While the European Commission is ready to take this into account, the criteria remain unclear.
The Commission is “firmly committed” to grant all the breathing space allowed by the Stability and Growth Pact to address “unusual events outside the control of the member states” with a major impact on their public finances, a spokesperson said.
The executive will assess the requests submitted by member states to use the flexibility clause on a case by case basis, “taking into account the level of resources earmarked for assisting refugees”, the spokesperson added.
However, the Commission declined to clarify which actions would be included under refugees’ assistance, such as integration policies, housing, school, health assistance, or border control. The executive only ruled out that this additional fiscal space would not be granted for measures such as building border fences.
It also remains unclear whether a threshold will be established to trigger the flexibility clause, such as spending in relation to the GDP ratio.
Commission President Jean-Claude Juncker told the European Parliament’s plenary this week that “countries that do not make an extraordinary effort or cannot prove it, will not have a more flexible interpretation of the Pact”.
He added that since the Commission arrived “at the end of our budget possibilities”, member states and the European Investment Bank should consider “additional ways of financing” to respond to the refugee crisis, which is, for some EU leaders, the most serious challenge in the bloc’s history.
A group of eurozone states, including Austria, Belgium and Italy have notified the executive of their additional spending in their draft budgets for 2016. The Commission is currently assessing the national budgets and how to apply the flexibility clause. The verdict will be published by the end of November.
But a group of member states led by Germany are against easing the fiscal rules because of the crisis. A spokesperson for Germany’s Ministry of Finance recently said that it would be “wrong to change or soften” the EU fiscal rules to respond to the refugee influx.
Echoing Berlin, Bulgarian Prime Minister Boyko Borissov told reporters after last week’s mini-summit that member states should strictly comply with the deficit and debt rules in order to avoid turning the refugee crisis into a new financial crisis.
Meanwhile, the eurozone’s finance ministers expressed their disagreement on how to factor in assistance to the refugees during the last Eurogroup meeting.
Austrian Minister of Finance Hans Joerg Schelling said that some eurozone countries are “really affected by the cost of the refugees and I don’t think it would be right if we said we were unable to reach a zero structural deficit due to the costs of the refugee crisis and then still get punished by the Commission”.
However, other finance ministers, such as Belgium’s Johan Van Overtveldt, preferred to be more cautious on the use of flexibility, as the rules cannot be twisted “whenever something happens in the world”.
These diverging views on how to assess the bill reflect the political infighting continuing among the member states on how far the flexibility clauses included in the SGP should go. The Council is expected to produce its interpretation by December.
Germany is leading the push to water down the Commission’s communication.