BRUSSELS (MNI) – The European Commission plans to get tough on
countries that disrespect the EU’s economic rules and will closely
monitor Italy’s implementation of pledged fiscal and structural reforms,
the EU’s Economic and Monetary Affairs Commissioner Olli Rehn said
Thursday.

“We cannot afford to tolerate a disrespect of jointly agreed rules
by anyone anymore,” Rehn said in the text of a speech delivered at the
German parliament. “We have seen, only too concretely, that it happens
at the cost of other member states.”

“Yesterday, Italy presented a strategy for rapid fiscal
consolidation and growth-enhancing structural reforms, with clear
measures and an ambitious timetable. Delivery on these commitments will
be monitored closely by the Commission and the Council,” he said.

Rehn, who today was designated “Commissioner for the Euro” in
addition to being Commissioner for Economic and Monetary Affairs, said
that countries sharing the single European currency needed to instill a
“stability culture” as the “core principle of economic governance in the
EU.”

Following their summit, which began Wednesday and ended in the
early hours of Thursday morning, Eurozone leaders are now ready to
legislate debt limits in their constitutions and to require economic
rule breakers to submit their budgets to Brussels for approval, he said.

Ireland’s success in rebuilding market confidence validates the
EU’s approach in requiring bailout countries to implement reforms, said
Rehn.

“Last night, the euro-area leaders committed to further
reinforcement of economic governance,” he said.

“They are ready to introduce debt brakes into national legislation
and call for prior examination of draft national budgets by the
Commission and the Council for such countries that violate the rules on
the excessive deficit and/or macroeconomic imbalances. The Commission
should monitor budget execution and, if necessary, suggest amendments,”
he said.

Eurozone countries that receive bailout assistance should be
subject to greater scrutiny not just during their restructuring
programmes but until all their loans have been repaid, said Rehn.

EU lawmakers only this month agreed new legislation including more
automatic sanctions for economic rule breakers, but they already are
working on further measures to strengthen economic coordination and
discipline in the Eurozone.

At their emergency crisis summit which ended in the early hours of
Thursday morning, Eurozone leaders committed to administrative reforms
for the euro area and called on the EU’s legislative branches to come up
with more far-reaching measures, which could require treaty changes.

— Brussels newsroom, +32-495-228-374; pkoh@marketnews.com

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