This #FBFDiscuss! debate revolved around the Stability and Growth Pact’s 3% deficit rule and whether, following the Covid-19 setting, it should be abandoned or not. As per our previous debates of this series, we brought together two contestants and polled our audience throughout the webinar. Jean Pisani-Ferry (Tommaso Padoa Schioppa Chair at the European University Institute) was our proponent and Volker Wieland (Endowed Chair for Monetary Economics at the Institute for Monetary and Financial Stability) our opponent to the motion “Should the Stability and Growth Pact’s 3% deficit rule be abandoned?”. The debate was moderated by Maria Ana Barata (FBF). Due to rounding, numbers presented may not add up precisely to the totals provided. The debate opened by asking our participants for their opinion on the motion:
In the second poll we asked our participants their view on the fact that the EU activated in March 2020 the general exemption clause of the Stability and Growth Pact in order to make it possible for member states to support their economies.
According to the results of the first two polls: for the majority of the respondents, the 3% deficit rule should not be abandoned, but both the debt and deficit targets should be redefined before the exemption clause is de-activated. The third poll asked our participants’ opinion regarding the modification of the EU’s fiscal parameters (i.e. the 3% deficit threshold and the 60% debt threshold):
The fourth poll focused on today’s economic setting being very different from when the SGP was designed over 20 years ago. This question asked what the most important feature would be if the EU fiscal framework were to be revised in the upcoming months
Finally, the audience was asked again, at the end of the debate, their opinion on the motion. This time, the majority of the respondents – even if by a very slim margin – was in favour of the abandonment of the SGP’s 3% deficit rule.