BRUSSELS (MNI) – Eurozone finance ministers have agreed on the main
points for reforming economic governance in the 16-nation bloc, but the
devil will be in the details, Jean-Claude Juncker, the president of the
Eurogroup and Prime Minister of Luxembourg, said on Monday.

“We were able to agree on the main aspects of the reform of
governance,” Juncker said following a regular monthly meeting of the
Eurogroup. “Sanctions will be more automatic and they will bite sooner,”
he added.

But he cautioned that “the devil is in the details,” hinting that
there is still some disagreement on the finer points of how the new
rules will work.

Olli Rehn, European Commissioner for Economic and Monetary Affairs,
said he is “satisfied with the progress made” by finance ministers and
that he expected a deal “broadly in line” with the European Commission’s
proposals for semi-automatic sanctions and fines for rule offenders.

He said the emphasis was on prevention and that he hoped the
European Parliament could have the legislative work completed by summer
of 2011.

“Strengthened governance will become operational by 2012,” Juncker
declared.

European Union finance ministers first decided to beef up the rules
on debt and deficit levels earlier this year, after concerns about some
Eurozone members caused chaos in the markets and forced the Eurozone and
the International Monetary Fund to create aid mechanisms for Greece and
other EMU states.

European Council President Herman Van Rompuy has chaired several
meetings on the topic with little to show so far, and the European
Commission has come up with a set of ideas that have proven contentious
among finance ministers. Van Rompuy is set to present his paper on the
topic to EU leaders at a meeting on October 28 and 29.

Plans have already been watered down so that the toughest rules
would apply only to Eurozone members; the plan for EU nations not in the
currency union would be different.

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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