* EU debt rules have changed many times
* But not designed to deal with overlapping crises
* Finance ministers to debate further reform
By Jan Strupczewski
BRUSSELS, Sept 8 (Reuters) - Byzantine, politicised or just plain stupid, European Union fiscal rules have been called many names and changed many times. Now the EU is starting another debate to reform them as it faces overlapping crises the rules were not designed to deal with.
EU finance ministers will kick off the debate on Saturday, confronted with high debt after two years of bolstering economies during the COVID-19 pandemic and huge investment needs to prevent the ultimate crisis of climate change.
To make things worse, they also face a cost-of-living crisis with record high inflation, soaring energy costs as Russia slashes gas supplies to Europe, and a looming recession that is already draining hundreds of billions from government coffers in various support measures and more is sure to come.
EU rules, conceptually rooted in the economically more stable times known as the "Great Moderation" in the 1990s and aimed mainly at safeguarding the value of the euro through curbs on government borrowing, have a hard time coping with all that.
They say public debt must be below 60% of gross domestic product (GDP) and government deficit below 3% of GDP.
But the pandemic left many countries with debt well above 100% of GDP, with Greece at around 185% and Italy around 150%, and 2021 deficits often twice the EU limit.
This makes it impossible for many governments to adhere to the EU rule that they should cut debt each year by 1/20th of the difference between its current level and 60% of GDP.
Position papers of France, Italy, Germany, Spain and the Netherlands as well as senior EU officials say the 1/20th rule will therefore have to go - either explicitly, or because governments and the Commission agree not to apply it.
But it is not clear what it could be replaced with. Berlin thinks governments should simply cut their structural deficit every year by at least 0.5% of GDP until they reach balance. That, combined with economic growth, would take care of debt.
"The most probable outcome is that we will get something very similar to the German position in the end," one senior euro zone official involved in the talks said.
DEFICIT CALCULATIONS
Another sticking point is how to deal with the hundreds of billions of public investment, needed to attract even more private cash, to first halve carbon dioxide emissions in Europe by 2030 and then stop them completely by 2050.