BRUSSELS—So often the source of rows between its members, the European Union starts reviewing its rules for national budgets on Tuesday to fit a post-pandemic reality of higher public debt and the huge costs of transitioning to a zero-emissions economy. During the landmark review—likely to take until the end of 2022 at least—governments, economists, and academics will also debate how to simplify the so-called Stability and Growth Pact, which has grown so complex that few people fully understand it. What began in 1997 as two regulations and a resolution of some 12 pages in total has since multiplied several times and is accompanied by a 108-page user manual, updated every year by the European Commission. The main goal of the Pact is to protect the value of the euro by curbing government borrowing, because while the euro zone has a single monetary policy underpinning its currency, each of the 19 …
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