An unlikely duo got together to change the Stability and Growth Pact. But now their governments are on their way out.
The collapse of two governments that forged an unlikely alliance on EU spending rules reform has complicated already difficult negotiations, raising doubts over whether a deal can be clinched ahead of June’s European elections.
In a rare example of North-South cooperation on fiscal matters, the Netherlands and Spain worked together to overhaul the Stability and Growth Pact but with both countries facing snap general elections, officials fear the process could falter.
“The loss of Dutch Prime Minister Mark Rutte and probably Spanish Prime Minister Pedro Sánchez is a blow to the pro-reform coalition heading into the autumn,” said Mujtaba Rahman, Europe director at political risk analysis firm Eurasia Group. “Both were champions of more flexible fiscal rules.”