Early Saturday, the European Parliament and member states finalized an agreement on revisions to EU budgetary regulations, targeting heightened investment alongside prudent fiscal management.
This updated framework, which amends the existing Stability and Growth Pact from the late 1990s, aims to enhance economic vitality by modernizing restrictions on national debt (capped at 60% of gross domestic product) and public deficits (limited to 3%).
EU’s initiative
For two years, the European Union worked hard to come up with changes that would satisfy both the countries that want to save money, like Germany, and the ones that want more freedom in spending, like France and Italy. 
The negotiators ultimately reached an agreement early Saturday, ensuring that the text could be put to a vote in Strasbourg this spring, just before the parliamentary recess preceding the European elections.
The new rules will help make sure countries manage their money well, make important changes to their systems, and encourage investing, growing the economy, and creating jobs in the EU, according to the Belgian presidency.
The old budget rules were seen as too strict and weren’t followed properly. But during the COVID-19 pandemic, these rules were put on hold to allow countries to spend more money during a time when the economy was really struggling.
What are the advantages?
The agreement gives governments more time to reduce their extra debt, allowing them to do it more slowly over four to seven years. It also includes exceptions that let countries like France and Italy tighten their spending more gradually.
The agreement follows the Stability and Growth Pact, which 
sets limits on deficits and national debt, being put on hold for four years due to the pandemic and Russia’s invasion of Ukraine. During this time, debt and deficits increased across the EU. Economists believe that the new fiscal rules will make governments reduce spending gradually, which could impact the struggling economy of the region.
The eurozone grew slowly by 0.5% in 2023. This year, it’s expected to grow a bit faster, at 0.8%, as per the European Central Bank. However, the European Commission may lower its growth predictions for 2024 next week.
