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New Fiscal Rules Agreed: What It Means for Young People in Europe

23/04/2024

In Brussels decisions are made that shape the lives of millions, yet few are as important as today’s plenary vote on the economic governance review in the European Parliament. In simple terms, MEPs voted today on new rules for public spending. These determine how much governments in the EU are allowed to spend on essential things like education, healthcare, transport, social security, unemployment benefits and climate action. With the adoption of the legislation through 367 yes votes, 161 no votes and 69 abstentions, it's crucial to look at what this means, particularly for young people across the European Union.

By Jan Mayrhofer & Thomas Desdouits

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Thomas
Thomas Desdouits

austerity will be back

The new rules are bad news for young people and for our collective fight against the climate crisis. These rules are far from youth-friendly and green. They will force big budget cuts in many Member States. Their recent adoption signals the beginning of another era of austerity, more intense and in more countries this time, restraining our efforts to combat climate change and secure our future. Austerity is an economic policy that cuts public budgets to reduce public debt. It is unfair and inefficient, and it hurts young people more.

The vote today shows that governments have not learned from their mistakes. In the 2010s, European institutions have already imposed such policies on national governments (including Spain, Greece, Italy, Portugal and Ireland), leading to hardship for an entire generation. When governments - or in this case the EU - cut budgets, young people suffer. We had already warned them not to do it again in our Generation Austerity report.

new vs old: is there any sign for hope?

When we set out our vision and demands for a new fiscal framework in our Fiscal Policy Position Paper we were advocating for a major shift towards fiscal rules based on wellbeing, sustainability and intergenerational justice. This has not happened. Yet, there are some signs that politicians heard our plea for a more flexible, data-based approach. This is apparent in the idea of tailoring budget adjustments to fit each country's situation, a so-called debt sustainability analysis (DSA), which is included in the new set of rules.


This means that people in some Member States will suffer more than others. A recent study by the European Trade Union Confederation compares public investment needs to the new rules. It finds that, because of the new rules, 18 Member States including Germany, France, Italy, Spain and Poland could not make the investments needed to support their social infrastructure. Only three Member States will be able to spend enough money to support their social infrastructure and stay on the emissions path they agreed to in Paris. You can check out what this means for your country here.

acknowledging our successes in a difficult political climate

Despite the disappointing outcome, it's essential to recognise our own efforts and contributions, in collaboration with our partners and the FiscalMatters coalition. Without our tireless advocacy in shaping the discussions around the policy, the outcome could have been even bleaker.

We are proud to have trained a new generation of young advocates for a better fiscal policy through webinars and information sharing. Together, we were the ones representing the voice of young people in the economic governance review and told policy-makers - in countless bilateral meetings, through events with high-level speakers, numerous advocacy statements and open letters, and even a huge screen we parked in front of the EU’s Council building - to #FundOurFuture.

Our journey has been filled with challenges, excitement, moments of joy, and invaluable lessons. To all who have been a part of it: Thank you for your involvement and support along the way.

the fight must go on

As we look ahead, there is no question that our commitment to fiscal justice and a sustainable future must not stop here. With the new rules being adopted, it becomes important to explore alternative methods of financing to facilitate a just transition and investment in young people. We have already set the course for this through the adoption of a new strategic plan that includes important work on green and fair taxation.

Together, we will continue to champion the cause of young people, fighting tirelessly to #FundOurFuture and build a brighter tomorrow for us and generations to come. Join us!

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