Pierre Moscovici: EU needs simpler budget deficit rules

The European Commission’s rules governing member countries’ excessive budget deficits are “too complex,” according to Pierre Moscovici, the commissioner for economic affairs.

Speaking at POLITICO’s Morning Exchange Live event today in Brussels, he said the Stability and Growth Pact needed to be simplified.

“We need to commit on the coherence of the pact. We can discuss that. Simplify, yes. Destroy? Certainly not.”

In answering a question about the “flexibility” the Commission showed in applying the budget rules on Spain and Portugal earlier this year, Moscovici said, “we didn’t want to sanction countries that make efforts and that have suffered a lot during the crisis.”

“The idea is that sanctions can be used and must be used when necessary, but should be avoided as much as possible,” he added. “Sanction is always a failure … for the countries but also for the rules.”

Moscovici said the Commission’s preference is incentives and reforms over sanctions.

“We’re not anti-sanctions, but we want to apply sanctions only when absolutely necessary … With Spain and Portugal, we really made the right decision.”