Current debt ratios are so high that external financing costs have become prohibitively expensive for governments. The new rules shall prevent future debt accumulations and thus increase confidence in bond markets. This should lead to lower interest rates, thus freeing the financial resources needed for public investment in the medium term.

Compliance with the rules was very low and led to the EU debt crisis and current inflation. Therefore, the reform needs to increase penalties levied on member states to increase their motivation for compliance.

The existing rules imply that many member states will be forced to decrease their debt ratios sharply within the next few years. Such coordinated fiscal consolidation would prevent the member states from investing in security and the green transition.