From COP27 to EU spending rules, here are the top stories of the week

_State of the Union is our weekly show from Brussels that brings you the top stories of the week.
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The United Nations’ COP27 climate conference kicked off in Egypt this week after a year of extreme weather.

In the past few months, climate-induced catastrophes have killed thousands, displaced millions and cost billions in damages across the world.

Massive floods devastated Pakistan and Nigeria, while big rivers in Europe carried spectacularly small amounts of water.

Droughts worsened in Africa and the western United States and hot summer temperatures in Europe stretched well into October.

The warning issued by the UN secretary general sounded like we have heard it all before.

“The clock is ticking. We are in the fight of our lives and we are losing. Greenhouse gas emissions keep growing, global temperatures keep rising, and our planet is fast approaching tipping points that will make climate chaos irreversible,”  said Antonio Guterres.

“We are on a highway to climate hell, with our foot still on the accelerator…humanity has a choice: cooperate or perish. It is either a climate solidarity pact – or a collective suicide pact.”

For the first time, the hot-button issue of reparations was adopted onto the official agenda, raised for the first time by climate-vulnerable countries from the Global South 30 years ago.

Sometimes referred to as “loss and damage” payments, this money is designed to help countries deal with catastrophic climate effects not of their own making.

The United States and the EU have in the past rejected these extra payments, but Brussels has since signalled a change of heart, as European Commission President Ursula von der Leyen said.

“It’s important to sit down and really define and sort out what it is, and then to look at the funding that is available and I’m not speaking of the 100 billion that are for climate finance there…I’m speaking about other funds we have to look at,” she said in Egypt.

Mats Engström, senior adviser at the Swedish Institute for European Policy Studies told Euronews not to expect too many new commitments on climate action from COP27.

“We have not seen that many new commitments forthcoming and it’s a difficult geopolitical situation, but we can hope for it perhaps in two years’ time, in 2024, when there will be a meeting in Europe like this and also a big summit of the future at the UN,” Engström said.

EU spending rules to change?

Brussels appeared ready to make austerity a thing of the past this week as well, as it took the first formal steps to reform the long-standing fiscal rules that rein in excessive government spending.

The legally-binding rules, which date back to the Maastricht Treaty in the early 1990s, compel EU states to keep their public deficit below 3% and their debt-to-GDP ratio below 60%, thresholds that many currently exceed by a significant margin.

The rules have remained suspended since the outbreak of the COVID-19 pandemic in March 2020.

A new proposal by the European Commission, unveiled on Wednesday afternoon, intends to open a new chapter and move past the contentious economic debates that have characterised the last decade.

“Almost all member states have broken the rules at one time or another,” Valdis Dombrovskis, the European Commission’s Executive Vice-President, told reporters. “And the rules have also become very complex.”

Under the Commission’s proposal, both the 3% deficit and 60% debt targets will remain untouched but greater flexibility will be introduced to adapt the goals to the specific circumstances of each country.

Capitals will be able to come up with their own blueprints to control public deficit and gradually decrease debt across a four-year period. Highly indebted countries might be granted an extra three years to adjust their finances.

The plans will be negotiated first with the European Commission and then approved by the EU Council, building upon the model used to unlock COVID-19 recovery funds.