The EU hopes to move towards healthier public finances after the expected passage of reforms to the bloc's spending rules on Tuesday in the European Parliament.

Brussels has spent two years negotiating an overhaul of its budget rules that have pitted fiscally hawkish states against the bloc's most indebted nations.

EU negotiators finally reached agreement on the reform in February and now the European Parliament must give its final green light. It will become official once the EU's 27 member states endorse the text.

Once in place, the new rules will force governments to get national spending under control, but they give greater leeway for investment in critical areas like the green and digital transitions, as well as defence. The old rules had been suspended between 2020 and 2023 to help the European economy weather the Covid pandemic and then Russia's assault on Ukraine, which sent energy prices soaring.

There was widespread agreement that there could be no return to the old rules without changes to make them practicable, despite public debt ballooning across the bloc.

Known as the Stability and Growth Pact, the rules stipulate a country's debt must not go higher than 60 percent of gross domestic product, with a public deficit of no more than three percent.

These goals remain in place, though there was fierce debate over how much the limits should be relaxed to give more room for investment.

"This reform constitutes a fresh start and a return to fiscal responsibility at the same time," said Markus Ferber, an EU lawmaker for the parliament's biggest centre-right group, the EPP.

"The old fiscal rules had many weaknesses and loopholes and suffered from almost non-existent enforcement," he added.

The new text provides looser fiscal rules adapted to each state, allowing big spenders a slower route back to frugality.

The tailormade approach means each country presents its own adjustment trajectory to ensure debt sustainability. That gives them more time if they undertake reforms and investments and allows a less painful return to fiscal health.