Why a decision on EU debt and deficit rules is going to the wire

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Good morning. There are seven quick days left till the final EU leaders’ summit of the 12 months, and no signal of a compromise deal on any of the important thing points that shall be mentioned there. The bloc’s diplomats will earn their Christmas break over the approaching week.

At present, our glorious new finance and economic system correspondent walks you thru the crunch choice on debt and deficit guidelines dealing with EU ministers tonight over supper, whereas our Athens correspondent previews the primary go to by Turkey’s president to Greece in six years.

Foremost course

Finance ministers are resulting from chew on a reform of EU fiscal guidelines at dinner this night, however a compromise digestible to all is proving exhausting to serve up, writes Paola Tamma.

Context: Guidelines governing debt and deficits within the EU, referred to as the Stability and Development Pact, are thought of too strict and have been haphazardly enforced. The European Fee in spring proposed an overhaul in favour of multiannual, custom-made spending plans, primarily giving international locations extra time to carry down extreme debt.

However the proposals have been thought of too lax by a bunch of nations led by Germany, who efficiently pushed for tighter necessities or “safeguards”.

The newest compromise that’s in entrance of ministers right this moment additional accedes to German calls for by setting numerical targets for annual debt cuts and limiting annual spending.

“We see that as a giant success within the negotiations,” a senior German official mentioned, ranking the possibilities of a deal at 50/50, “if not higher”.

This in flip roils others, together with France and Italy, who concern they’ve little to realize from swapping the established order, imperfect as it’s, for a reform that might curtail public investments and constrain spending at a time of rising curiosity prices.

The fee can also be afraid that the safeguards grafted on its proposal essentially undermine the purpose of getting less complicated guidelines that might not deepen an financial contraction.

“The purpose of simplification is out of the window. That of making a countercyclical system is in danger,” mentioned an EU official.

Nonetheless, for a lot of if not all, a nasty deal is healthier than no deal.

“I feel we nonetheless shall be arriving at a system that may protect the fundamental parameters of the fee’s proposal, regardless that perhaps with some substantial deviations,” EU government vice-president Valdis Dombrovskis instructed the Monetary Occasions.

Spain’s purpose is to get ministers to again a deal by Friday. It might then be as much as Belgium, who’s taking on the rotating EU Council presidency from Spain in January, to barter a compromise with parliament, which nonetheless must vote by itself place.

The ultimate purpose is to wrap this up earlier than EU elections subsequent June. Bon appétit.

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Frenemies

Turkish President Recep Tayyip Erdoğan visits Athens right this moment for the primary time since 2017 to fulfill Greek Prime Minister Kyriakos Mitsotakis, aiming to strengthen the just lately warming local weather between the 2 leaders, writes Eleni Varvitsioti.

Context: Relations between Athens and Ankara have been rocky for years, with tensions heightening in 2020 when Turkey despatched warships alongside a survey ship to search for attainable oil and gasoline reserves in disputed waters within the Aegean.

The 2 leaders haven’t had direct, bilateral contact since Could 2022, when Mitsotakis lobbied towards Ankara’s efforts to purchase F-16 fighter jets from Washington. “There’s not anybody known as Mitsotakis in my e book,” Erdoğan mentioned again then.

Erdoğan yesterday explicitly linked Washington’s approval for that F-16 buy to Turkey’s approval of Sweden’s membership of Nato — one other difficulty that the 2 leaders are prone to focus on.

The go to follows Greece’s response to a devastating earthquake in Turkey final February, which left hundreds useless and thousands and thousands displaced. Athens noticed it as a possibility to unfreeze the diplomatic relations between the 2 international locations and was one of many first international locations to ship humanitarian help.

One of many important gadgets on the agenda right this moment shall be migration and enhancing communication channels between the 2 international locations’ coast guards.

There’s additionally an anticipated announcement of an initiative to grant Turkish residents one-year visas to go to the East Aegean Islands.

What to observe right this moment

1. European Council president Charles Michel and European Fee president Ursula von der Leyen are in Beijing for the EU-China summit.

2. French President Emmanuel Macron hosts Hungary’s Prime Minister Viktor Orbán for a working dinner in Paris.

3. Eurogroup finance ministers meet.

4. EU trade ministers meet.

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