100bn in cuts next year under Council austerity plan

EU member states could be forced to collectively cut their budgets by more than 100 billion Euro next year under the Council’s plans to reintroduce austerity measures.

France (26bn), Italy (25bn), Spain (14bn), Germany (11bn), Belgium (8bn) and the Netherlands (6bn) would have to make the biggest annual cuts to meet the deficit reduction targets within four years.

Member states could request to extend the cuts over a seven year period but risk to be in exchange for commitments to harsher anti-worker economic reforms.

Table 1: Comparison between cuts required every year under a four or seven year austerity plan

The ETUC is publishing the figures ahead of today’s European Parliament vote on the future of the EU’s fiscal rules. The ETUC is calling on MEPs to ensure:

- That no so called ‘deficit safeguards’ are introduced because they will have a severe negative effects on GDP
- Investment needed for the green transition or the European Pillar of Social Rights must be protected and anti worker reforms need to be prevented

- Limits on debt to GDP ratio should start to decline after the end of the adjustment period

ETUC General Secretary Esther Lynch said:

“At a time when Europe should be investing in a green future, plans to reintroduce austerity would return Europe to its darkest period.

“It is incredible that national ministers have signed up to a plan that would force them to make spending cuts of more than 100 billion Euro in one year alone.

“Governments should be honest about what this will mean for their citizens: a huge number of job cuts, lower wages and worse working conditions, and further underfunding of public services.

“The European Parliament now has a crucial role to play in limiting the damage by ensuring the fiscal rules do not force countries to go too far and too fast in reducing their debt and deficit.”

Notes

Excel file containing full figures

The figures are based on an assessment made by Bruegel in December 2023.

Table 2: Minimum annual cut in Euro required in 2025 under Council plan of either 4 or 7 years