Bundesbank President Joachim Nagel has shown himself open to a limited relaxation of EU debt rules. In the “Interview of the Week” on Deutschlandfunk, he said such a relaxation would be tolerable if it remained time-limited and thematically specific. The reason for the possible softening of the rules is the Iran war, which necessitates higher government spending in the European Union.
Nagel emphasized that the relaxation must not be permanent. It must be clearly linked to the consequences of the war and reversed once the war ends. The Bundesbank president thus cautiously agreed with considerations being discussed in Brussels and several EU capitals.
The EU debt rules, which cap new borrowing at three percent of economic output, were already suspended during the coronavirus pandemic and the energy crisis. A renewed suspension or relaxation would require a political majority in the Council of the EU.
Source: www.deutschlandfunk.de
