BRUSSELS (MNI) – The European economic recovery depends on shoring
up public finances in the 27 member EU, Swedish Finance Minister Anders
Borg said on Friday.

“If we want to secure the recovery, we need to secure the public
finances,” Borg told reporters as he arrived for a meeting in Brussels
where economic governance reforms will be discussed.

He said this should include “more front-loaded consolidation and
more emphasis on debt.”

“We need a tighter reporting schedule,” Borg said. “We also need to
have stronger sanctions and better national frameworks. The whole
culture of stability must be reinforced in the budget process.”

European Union finance ministers and representatives from the
European Commission and the European Central Bank are attending a
meeting of European Council President Herman Van Rompuy’s task force,
which aims to expand economic governance in the European Union to
reassure worried investors that the bloc is in control of its heavy debt
burden.

German Finance Minister Wolfgang Schaeuble is set to present a
nine-point plan intended to tighten the current EU rules.

Borg said the German proposals contain “strong points.”

But other finance ministers are expected to reject a wholesale
acceptance of Germany’s proposals because, they say, they risk
infringing on national sovereignty.

Earlier, as she arrived for the meeting, French finance minister
Christine Lagarde told reporters that the German proposals “go in the
right direction.” But she stopped short of a full endorsement.

Earlier this week, George Osborne, the UK’s new Chancellor of the
Exchequer, said national budgets are firstly a matter for national
parliaments.

Current EU rules stipulate that a country’s annual government debt
should be less than 60% of its gross domestic product and budget
deficits should be below 3% of GDP. Many countries are currently in
breach of those rules, with Greece the worst offender. Its budget
deficit of 13.6% is more than four times the limit.

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

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