EU Reaches Agreement on Spending Rules

The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
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EU Reaches Agreement on Spending Rules

The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File
The EU has spent two years making an intensive effort to develop reforms to spending rules. PHILIPPE HUGUEN / AFP/File

The European Parliament and member states reached an agreement early Saturday on reforms to EU budgetary rules aimed at boosting investment while keeping spending under control.
The text modernizes the current rules, known as the Stability and Growth Pact, created in the late 1990s, which limit countries' debt to 60 percent of gross domestic product and public deficits to three percent, AFP said.
"Deal!," the Belgian Presidency of the Council of the EU said on social media platform X after 16 hours of talks.
The European Union spent two years making an intensive effort to develop reforms supported by the more frugal member states like Germany and other countries, such as France and Italy, which seek more flexibility.
After much wrangling between Berlin and Paris, the 27 member states struck a deal in December, then began talks with negotiators from the European Parliament.
The text was criticized for its great complexity and derided by left-wing officials as a tool for imposing austerity on Europe.
The negotiators finally reached an agreement early Saturday, in time for the text to be voted on in Strasbourg this spring before the parliamentary break ahead of European elections.
The reforms will be formally adopted after agreement between lawmakers and states.
The agreement will allow member states to apply the new rules to their 2025 budgets.
"The new rules will help achieve balanced & sustainable public finances, structural reforms, foster investments, growth & jobs creation in the EU," the Belgian presidency said.
Wiggle room
The former budgetary framework was considered too drastic and was never really respected.
The rules had, however, been suspended since the coronavirus pandemic to give member states wiggle room to spend more during a period of great economic upheaval.
During the initial debates between countries, the battle was fierce over how much those old limits should be relaxed to give more room for investment.
With war raging in Europe and the EU making a green transition push, states led by France argued for allowing more space to finance these key areas, including, for example, supplying critical arms to Ukraine.
While confirming the previous limits on debt and budget deficits, the new agreement allows more flexibility in the event of excessive deficits.
The text provides looser fiscal rules more adapted to the particular situation of each state, allowing big spenders a slower route back to frugality.
The tailor-made approach means each country presents their own adjustment trajectory to ensure their debt's sustainability, giving them more time if they undertake reforms and investments and allowing a less painful return to fiscal health.
Monitoring would focus on expenditure trends, an economic indicator considered more relevant than deficits, which can fluctuate depending on the level of growth.
But Germany and its "frugal" allies managed to tighten this budgetary framework by imposing a quantifiable minimum effort to reduce debt and deficits for all EU countries, despite the reluctance of France and Italy.
These modifications have greatly complicated the text.
"We have a deal! A new economic governance framework was much needed," Dutch MEP Esther de Lange said on X.
"We have ensured that the new fiscal rules are sound and credible, while also allowing room for necessary investments," said de Lange, of the center-right European People's Party Group.
The reforms are also supported by the EU's Renew liberals and a large majority of the Socialist and Democrat groupings.
The Greens and some S&D elected officials, however, reject it, as do the radical left.
These elected officials have denounced a return to austerity after three years of suspended budgetary rules due to the pandemic and war in Ukraine.
"We need investments in industry, in defense, in the ecological transition, that's the urgency today, it is not to bring economically absurd rules up to date," economist and S&D MEP Aurore Lalucq of France told AFP.
She denounced it as a "political error which will be used by populists to attack Europe".



Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."