Maastricht 2.0 — Proposed reform of EU sovereign debt rules
Sovereign debt had risen dramatically in the vast majority of European states even before the worldwide financial and economic crisis struck in 2008. The European Union is attempting to bring mushrooming sovereign debt under control via a new instrument, the Fiscal Compact of March 2012, which calls for all signatory states to impose a cap on national debt comprising a maximum structural deficit of 0.5 percent of GDP. The Compact's debt brake rules leave much to be desired when it comes to promoting economic growth. Bertelsmann Stiftung and Prognos AG propose a sovereign debt framework which would be much more conducive to economic growth than the inflexible Fiscal Compact. The new sovereign debt framework (Maastricht 2.0) takes into account national peculiarities, but is by no means arbitrary in nature.