EU proposes more forgiving debt plans a decade after crisis

BRUSSELS (AP) — The European Union is considering more lenient economic recovery proposals that veer away from the grinding, top-down austerity rules that hit Greece and several other countries during the debt crises a decade ago and helped push millions into poverty, homelessness and unemployment.

The European Commission, the EU’s executive arm, said Wednesday that the new plans would give member states with serious debt issues far greater leeway in seeking a viable path to economic sustainability, combining a commitment to longer-term debt reduction while not excessively burdening a stretched population over too short a time.

After the 27-nation bloc had to spend its way out of a COVID-19 recession and as another downturn looms with Russia's war in Ukraine worsening inflation, the challenge is keeping investment high and debt levels manageable.

“Of course, times they are a changing,” said EU Economics Commissioner Paolo Gentiloni, addressing the differences between the current proposals and earlier commission decisions.

During the debt crisis, struggling nations from Greece to Portugal were barred from more conventional methods like massive borrowing to spend their way out of bad times and instead had to tighten their belts. That focus on bringing debt down with strict budget rules instead of boosting economic growth is now often seen as having exacerbated the crisis for many people.

Gentiloni went close to saying as much Wednesday. The reduction of debt “was not successful because the rules became more and more unrealistic. And when you have unrealistic path, at the end you have no path."

Later, reflecting on the devastating consequences of the crises that nearly brought the euro currency to its knees, he pulled back and said, “I don’t think we could blame these...