The latest proposed reform to the European Union's debt and deficit rules would help avoid the problematic austerity measures of the past decade as the bloc tries to gradually bring down record-high debt levels. But persistent disputes between northern and southern member states may delay its implementation, while insufficient fiscal space for public investment in key policy areas would still increase calls for greater fiscal integration over time. On April 26, the European Commission unveiled its proposal to reform the European Union's Stability and Growth Pact (SGP), which establishes sovereign debt and fiscal deficit limits for member states. The proposal would see member states create and present plans laying out their fiscal targets and measures to address macroeconomic imbalances, along with priority reforms and investments over a four-year period. The new rules would allow EU countries to set their own fiscal adjustment paths as long as they ensure their public...
