FRANKFURT (MNI) – The fiscal compact recently agreed on by 25 of 27
EU members is a major step towards stricter fiscal rules and is thus the
“right medicine” for the Eurozone crisis, European Central Bank
Executive Board member Joerg Asmussen said in an opinion piece
pre-released Sunday.
Asmussen wrote in Germany’s financial daily Handelsblatt: “Without
a doubt, the new fiscal pact makes an important contribution to the
strengthening of European fiscal rules. It is the right medicine for
what we have recognized as one of the main causes of the sovereign debt
crisis – the lack of budgetary discipline.”
Especially important is the automatic correction of deviations from
sound fiscal practices, Asmussen affirmed: “The postponement of
consolidation until the ’12th of never’ is thus no longer an option.”
Another positive aspect is the pact’s solution to the tendency of
European national governments to ignore decisions made in Brussels, he
noted, underscoring the new text’s stipulation that the European Court
of Justice can render judgment upon and possibly even fine member
nations whose national laws do not incorporate the new rules and
corrective measures within a year.
Surveillance is now less discretionary and it is more difficult to
nullify the Stability and Growth Pact, Asmussen commented.
“The EU Commission should present ambitious convergence calendars
that distinctly exceed the adjustments envisioned in the Stability and
Growth Pact,” he urged.
The EU Court of Justice should be given the necessary powers to
verify the introduction and implementation by member states of the
budgetary rules and corrective mechanisms, he added.
It is crucial that the Commission’s ruling in the event of a
deficit procedure be considered valid unless voted down by majority,
Asmussen said.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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