The latest episode of Real Economy on Euronews asks “what does this mean for the future of government spending in the EU, especially when it comes to investment to combat climate change?” The current fiscal rules go back to the Maastricht treaty and the beginning of the euro area in 1992. At their core they mandate that annual fiscal deficits be capped at 3% of GDP and that overall government debt does not exceed 60% of GDP. During the pandemic, the rules were temporarily put on hold so that governments could spend more, but they are due to return in 2023. The Dutch finance minister Sigrid Kaag and Spanish finance minister Nadia Calviño are calling for a reform that would enable the public investments needed to implement the green and digital transitions. The Commission has published a review of its economic governance framework, along with a stakeholder consultation. It is due to make recommendations later in 2022. Paolo Gentiloni, Commissioner for Economy, recognises the need for change: “We all know that these thresholds were decided 25 years ago. We have now an average debt level near to 100% in the euro area. I think we have to adapt our rules to have a gradual path of debt reduction, allowing us to make the needed investment.”