Agreement emerging to change EU debt reduction rule -EU's Dombrovskis
BRUSSELS, Jan 17 (Reuters) - There is broad agreement emerging among European Union governments to change the existing EU rule on how fast countries must cut public debt, European Commission Vice President Valdis Dombrovskis told reporters on Monday.
Dombrovskis spoke on entering a meeting of euro zone finance ministers, who will discuss the ongoing review of EU fiscal rules, called the Stability and Growth Pact, designed to limit government borrowing to protect the value of the euro.
"Some areas of broad agreement seem to be emerging concerning the more gradual adjustment path of debt reduction and specifically the so-called 1/20th rule," Dombrovskis said.
The current rule is that governments must cut public debt every year by 1/20th of the excess above 60% of GDP. With many countries running debts well above 100% of GDP, such a rule is seen as unrealistic by finance ministers.
"We need credible debt reduction pathways. But they also need to be realistic and allow for green and digital transition," Dombrovskis said.
He said there was also broad agreement emerging that the rules need to be simplified and that their focus should move away from directly unobservable indicators like output gaps an structural balances. (Reporting by Jan Strupczewski)
