The European Parliament will hold a final vote today in Brussels on a new European Commission. The incoming Ursula von
The European Parliament will hold a final vote today in Brussels on a new European Commission.
The incoming Ursula von der Leyen administration—to take office on December 1, upon approval—faces a number of economic challenges, ranging from Brexit to expectations of a global economic downturn.
More immediately, the new Commission must address the ballooning debt in Italy and France. Public debt levels for both are expected to hit 136% and 98% of GDP, respectively, in the coming year, far beyond the EU’s 60% limit on public debt to GDP ratios.
If the Commission cracks down on Italian and French debt—possibly threatening legal action—it would indicate that the new EC seeks to take a harder line on EU regulations. Alternatively, a push for continued stimulus spending by less-indebted countries, like Germany and the Netherlands, would signal a less confrontational approach.
Both stances have their merits. The first strategy would prevent a dangerous precedent of allowing member states to breach EU fiscal rules without punishment, thus strengthening the legitimacy of the EU’s economic regime. The second strategy would likely spur economic growth amid fears of a global economic slowdown. In any case, the new Commission’s handling of the debt crises in Italy and France will set expectations for the bloc’s general strategy on upholding its internal rules and regulations.
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