–Adds detail on the German plan from weekly Wirtschaftswoche
FRANKFURT (MNI) – Germany will push other Eurozone countries to
adopt laws requiring that budgets be at or near balance, the Financial
Times reported Monday, citing a government source.
Something similar to Germany’s “debt brake” law, which requires
that the federal budget deficit be no more than 0.35% of GDP by 2016,
“would be a good idea for other countries to have — although it might
take on different shapes and forms for each member of the Eurozone,” the
source told the paper.
The law has been a part of Germany’s constitution since last year.
The idea of a debt-limit law at the European level also received
support from Austria’s Finance Minister, Josef Proell. He told Germany’s
Die Welt that “considering the high debt in Europe, I am in favor of a
European debt-brake law.”
“This would lead to a clear cap on new debt, to stricter budget
discipline, and ultimately to balanced budgets in Europe,” he explained.
German business weekly Wirtschaftswoche said Schaeuble will present
Germany’s demand for Eurozone-wide deficit limitation laws at the EU
working group on reform of the European Monetary Union, to be held on
The Minister will also call for tougher sanctions against Eurozone
members that breach the EU’s Stability and Growth Pact, the magazine
reported. Schaeuble wants violating countries to lose their voting
rights in the EU for at least one year.
Schaeuble will also reaffirm his call for an orderly insolvency
procedure for Eurozone states, the magazine reported.
–Frankfurt bureau; +49-69-720142; firstname.lastname@example.org