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Europe to introduce green test for budgets

By JULIAN SHEA | China Daily Global | Updated: 2020-01-22 09:36
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Countries' transitions toward greener politics and policies will be an increased priority for European Union member states after the European Commission announced plans for a new environmental monitoring aspect of assessing national budgets.

The commission's remit is to ensure member states keep their budgets reasonably balanced and do not run up excessive debts or deficits, and the plan is part of moves toward the EU becoming carbon neutral by 2050, a goal announced by the commission's new President Ursula von der Leyen when she took office at the end of last year.

The move, which could prove divisive between member states, is due to be discussed at meetings taking place in Brussels this week.

"For the first time in the commission's economic monitoring of national budgets we will have a green variable, which is very important," said EU Economics Commissioner Paolo Gentiloni.

"It's a change of perspective. When we assess budgets we need to look at expenditures, investments, but also at the results and pace of the green transition," he added.

There are fears that the cost of climate measures could add an extra financial burden to member states, and as yet it is unclear precisely how such regulations would be enforced.

New EU budgetary rules will be announced in February, and there already appears to be somewhat of a division between countries, partially on a North-South basis.

Some European countries, including Italy, as well as France, favor a more relaxed financial approach, which they say could encourage growth and speed up the green economic transformation. But Germany, which has a famously strict domestic fiscal policy in terms of debt, fears the easing up of rules could lead to ill-judged spending and more financial problems for the bloc.

The announcement of the new policy comes several months after the independent European Fiscal Board, which advises the Commission, said existing rules had a "number of weaknesses" and suggested a relaxation of regulations brought in after the EU debt crisis at the start of the last decade.

France's EU Commissioner for the Internal Market Thierry Breton has said the introduction of the new European Green Deal cannot happen overnight, and that there are no quick fixes to the problems raised by the climate crisis. "I have been through industrial transitions-it lasts a generation, 25 years," warned Breton, who is already working with Gentiloni to come up with new proposals.

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