Meeting on new EU powers over national budgets

ON Tuesday in Brussels the EU's 27 finance ministers discussed new transfers of power to the European Commission and examined proposals to tighten control over member states' budgets in the wake of the eurozone's debt crisis.

Finance ministers debated the so-called 'Two-Pack' of draft EU rules that would give Brussels sweeping new powers to scrutinise national budgets.

In November the European Commission proposed that it should be given new powers to "administer" countries that have sought international financial assistance to keep them from bankruptcy.

If the two bills were in force today, such an "enhanced surveillance" programme would apply to Greece, Ireland, and Portugal – the three countries currently receiving an EU/IMF bailout. In fact they already do, say EU sources, and the new laws will only codify existing practice.

But the proposed new rules would go further as the enhanced surveillance mechanism would also apply to countries whose budgets are deemed to be "at risk of experiencing severe financial disturbance".

A diplomat from a large EU member state says the new rules represent a big change in the way the bloc polices its debt and deficits.

"We are giving the Commission an important power of appreciation" to determine whether there is a risk that member states are a risk of default, the diplomat said.

"This will put everyone in front of their responsibilities," he added because no country will be able to ignore warnings anymore, as those will be made public. "This is an important power which is being given to the Commission."

Source: Euractiv.com