The key is the difference in policy on public debt between the EPP Group and the Socialists – a group that includes 29 Italian members from Renzi’s party. The S&D support for Juncker remains strictly conditional on “a more flexible interpretation of the Stability and Growth Pact." – code for more public debt. According to Paola Buonadonna’s story this morning (link), this is also a major requirement of PM Renzi.
But the EPP manifesto absolutely rejected taking on more public debt and, indeed, remains committed to a reduction in debt. Presumably Mr Juncker feels bound by the EPP manifesto that he championed in the election. If the two groups cannot build a `coalition agreement’ on this very fundamental policy disagreement, Mr Juncker could struggle to get the necessary 376 votes in the European Parliament. Financial markets will take a very keen interest in the outcome of this particular debate.
Graham Bishop - Consultant on EU Integration - Political, Financial, Economic, Budgetary
© Graham Bishop
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