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Fact check: Can Gentiloni change the fiscal rules?

Maybe it’s enthusiasm, maybe it’s wishful thinking. Whatever the reason, Patrizia Toia was wrong. On Tuesday (10 September) the Democratic Party (PD) MEP made public remarks containing false information about the European Union. And it’s put on writing, in the press release sent to the press immediately after the official nomination of Paolo Gentiloni as next European Commissioner for Economy.

“Paolo Gentiloni and Frans Timmermans will carry on the battle that we really do care, namely that of sustainable growth, investments in climate and the environment, with a revision of the stability and growth pact”. This what Toia, vice-president of Industry, Research and Energy Committee (ITRE), wrote in the press release.

Gentiloni can do nothing on SGP

Unfortunately the Stability and Growth Pact (SGP) is an inter-governmental agreement. For such a nature the European Commission can’t rewrite the legal text, even less can Gentiloni. If changes have to be applied to the SGP, it will be the Council of the EU to decide and work in that sense. Inter-governmental agreement can be re-discussed by governments and their members, which means ministers and leaders. So, the first ever Italian commissioner for Economy cannot do anything to change the European fiscal rules.

SGP based on Treaties

The Stability and Growth Pact, agreed in 1997, is based on the provisions set in articles 121 and 126 of the Treaty on the Functioning of the European Union (TFEU). Article 121, paragraph 1, in particular, made clear that economic matters are prerogative of the Member States. “Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council”.

Article 126, paragraph 1 and 2, of the aforementioned TFEU, explains the role played by the executive body of the EU. “Member States shall avoid excessive government deficits”. “The Commission shall monitor the development of the budgetary situation and of the stock of government debt in the Member States with a view to identifying gross errors. In particular it shall examine compliance with budgetary discipline […]”.

Since the Commission is the guardian of the treaties, commissioner Gentiloni will be obliged to ask Italy to comply with the rules and will certainly not in the position of ask for a revision of the rules. Furthermore, the TFEU, as well as the SGP, can be changed only by the Member States. No way, the Ursula von der Leyen Commission won’t bring the changes evoked by Toia. The only option possible to help Italy is to find more flexibility in the legal interpretation of the existing rules.

Huge mistake

With her press release Toia made a huge mistake, considering also her personal political career. She is in Brussels since 2004, when she was elected MEP for the first time. Toia is at her fourth European legislature, so she is supposed to know Europe very well. Before becoming a MEP, Toia served for six months as minister for European Affairs, (22 December 1999 – 26 April 2000). No excuses, then. After all, she is not a beginner.

We can guess that Toia realised what happened, because a corrigendum came from her. The following day (11 September) she released a new press release in which she said that Gentiloni got great responsibilities. No mention of SGP was made in the second press release. Toia just stated that “a clear mission for growth” has been given to the Italian commissioner by the president-elect of the EU Commission, Ursula von der Leyen. Spot the difference.

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