Unfortunately, the institutions of the European Commission more, and its member states less, have been filled with technocrats who have lost touch with reality
When the debate on the reform of the fiscal rules in the EU started, as the Fiscal Council we submitted (in summary) the position below:
-One goal should be established and any other "goals" should be supportive of the first. This objective should be the sustainability (ie ensuring serviceability) of the public debt and 'targets' such as the deficit or the rate of expenditure growth should advocate towards the achievement of the main objective.
-Sustainability should not be determined with a common mathematical formula and specific percentages but through a process. A country that borrows at a 2% lower interest rate cannot, for example, have the same public debt target as others. The process should be clear and institutionalized and include the national institutions of each country so that each country is accountable and its citizens do not perceive the goal as "imposed" by third parties.
More or less the position gained supporters but it "suffered" because many preferred the simplicity of clear numerical indicators such as 3% deficit and 60% debt. Even if over time and after the weaknesses were recognized, micro-reforms of the "yes, but" type were made. Reforms that again in the difficult periods were not effective. That is why in some cases we have their suspension.
Unsurprisingly, I heard the re-introduction of the nonsense that "defence spending will stop being counted in the budget deficit". I honestly cannot fathom how so many institutions, with so many resources and potential at their disposal, are still discussing this.
Consider going to the bank (not a Cypriot one) when assessing your ability to repay your loan and telling the bank not to take your health and education expenses into account.
Of course, a country in the position of Ukraine or Russia, regardless of its deficit, will spend on defense. Of course, a family, whatever its deficit, will incur the necessary health expenses. Whether their debt is sustainable or not is a matter of numbers, not where the spending came from.
Since the primary goal is debt sustainability, allowing spending that will make the debt unsustainable and then calling for debt measures will only cause problems.
I don't even want to get into the debate about what the definition of defense spending will be and a bunch of other practical problems. Unfortunately, the institutions of the European Commission more, and its member states less, have been filled with technocrats who have lost touch with reality. At the same time we have been filled with politicians without the depth and fortitude to stop and change this trend.
And because it's the holidays… I still believe in and support the EU. Using Churchill's phrase is the worst choice apart from the rest.