LUXEMBOURG (MNI) – EU Finance Ministers on Tuesday rubber stamped
legislation to strengthen economic governance and surveillance in the
euro area and EU as a whole, paving the way for the bills to become law.
The ministers had unofficially approved a compromise text,
negotiated with the European Parliament, at their informal meeting in
Poland last month.
The European Parliament passed the legislation at its plenary
session at the end of September.
Among the measures agreed are a streamlined procedure for
sanctioning countries that run excessive fiscal or current account
imbalances that could potentially punish countries that run large
surpluses, as well as deficits.
The present rules binding Eurozone countries constrain only public
deficits and high debt-to-GDP ratios.
Under the new regime, sanctions would be imposed automatically
unless a majority of countries which also represent a majority of the
EU’s population oppose them, a procedure that likely will make sanctions
tougher to escape than under the present system.
The new rules also set minimum standards for how all EU countries
should plan their budgets.
Although the new rules will do little in the short term to
extinguish the current crisis, they send a strong message to creditors
that countries in the euro area will in future have to follow stricter
economic discipline, analysts say.
EU governments and members of the European Parliament have been
struggling since last year to reach an agreement on the legislation,
described by EU officials as an essential part of the EU’s crisis
strategy, and failed to meet an aspirational deadline ahead of the
Eurozone leaders summit on 21 July and summer recess.
** Market News International **