PARIS – European Commission President Jose Manuel Barroso said
Tuesday that the Commission plans to propose that it be given new powers
to intervene more forcefully in the budget policies of member states.
Barroso, speaking at a press conference in Brussels with Italian
Prime Minister Mario Monti, said the proposals, to be made on Wednesday,
will allow the Commission to impose sanctions on member states that run
fiscal deficits above accepted levels.
Barroso said that if a state proposes a budget that is “not
compatible” with established rules, the Commission can ask that it be
sent back for a second reading in Parliament.
“We can even not accept this kind of budget,” Barroso said. “In
some cases we can think of sanctions, including monetary and financial
sanctions.”
The EU Commission president also said it would take a sustained
effort by governments to reduce their debt and deficits because market
perceptions cannot be changed from one day to the next.
He said that while the program of the Monti government addresses
the challenges that Italy faces, he would not expect a “magic change” in
market sentiment.
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