BRUSSELS (MNI) – European Commission President Jose Manuel Barroso
spoke out Wednesday against what he called the attempt by some EU
governments to create new institutions through the Fiscal Compact treaty
being negotiated by all the EU’s members except the United Kingdom.

At the European Parliament in Strasbourg, Barroso said that the
Commission and the Parliament were “rejecting drafting that could have
established parallel inter-governmental coordination of economic policy,
outside the European Union framework.”

“The euro area must be strengthened, yes, but not at the expense of
the wider Union,” he said. “The introduction of parallel structures
would embed divisions that could jeopardise the Union and also
jeopardise the single market and therefore the future viability of the
euro itself.”

The Commission president said the EU’s executive institution, which
is charged with ensuring the application of EU laws, wanted the Fiscal
Compact for tougher budget discipline to be integrated into EU law
within five years, and that it would insist that the new treaty
recognize the “primacy of EU law and its full application, in particular
that of EU procedures whenever the adoption of secondary law is

Barroso said that some amendments proposed by EU governments in
negotiations last week “could only lead to irritation and to division,”
but avoided comment on amendments that the European Central Bank said
could create loopholes for governments to escape the tough rules they
are supposed support.

EU leaders last December agreed to sign on to rules that would
require them aim for balanced budgets and limit fiscal deficits to 0.5%
of GDP. But UK Prime Minister David Cameron balked at the deal,
scuppering attempts to write the rule into the EU treaty and forcing the
26 other EU members to draw up a new agreement.

Governments are now negotiating the text of the Compact and hope to
sign them in March.

Responding to journalists at a press conference after a meeting
with the prime minister of Denmark, which holds the rotating EU
presidency, and the new president of the European Parliament, Barroso
revealed that he had received a letter from Hungarian Prime Minister
Viktor Orban, which he said showed Hungary’s willingness to resolve a
dispute with Brussels over a law affecting the independence of the
country’s central bank.

The Commission has said it will not begin formal talks with
Budapest over a financial aid package until the central bank’s
independence has been assured.

–Brussels bureau: +324-9522-8374;

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