Under terms of the EU’s Stability and Growth Pact, member states must keep their budget deficits under 3.0 percent and overall debt under 60 percent of GDP, although occasional adjustments are possible.

“The current ratios of public debt to GDP are much higher than before the pandemic in all countries of the EU,” said Nadia Calviño during a round table in Madrid with Paschal Donohoe who currently heads the Eurogroup of eurozone finance ministers.

“Therefore, the path for public debt reduction must be adapted to this new reality and take into account the specific circumstances of each country,” she said, calling for swift action to change the budgetary rules.

The pandemic has caused soaring levels of debt, which in France had risen to an estimated 115 percent of GDP by the end of 2021, and almost 122 percent in Spain, rendering the targets almost impossible without tough austerity measures.

In order for the European Union to avoid making the same mistakes of the 2008 financial crisis, “member states must play a leading role in setting their own fiscal targets,” Calviño said.

Brussels had urged member states to quickly get back on track to avoid a ballooning of public debt. But experts say the rush to impose austerity hampered the bloc’s recovery and caused long-term damage to its economy.

“We’re all aware of the lessons from the past crisis,” admitted Donohoe, who is also Ireland’s finance minister.

That was why it was necessary to find “the balance between debt sustainability and how to fund growth and investment”, he added.

There is an ongoing debate about the future of the EU’s fiscal rules which have been suspended until 2023 due to the pandemic, with some countries like France, Italy and Spain pushing for reform to allow more flexibility.

But others are reluctant to push through changes, with Germany’s new finance minister insisting last month on the need to reduce the EU’s sovereign debt.