EU Budget Rules Should Be National Law Says EU Business Lobby

BRUSSELS (MNI) – European Union rules on debt and deficits should
be incorporated into each member state’s national law, leading business
lobby group Business Europe said on Friday.

“An individual obligation towards discipline and stability, and a
collective drive to reform, are essential,” BusinessEurope’s President
Jurgen Thumann wrote in a letter to Belgian Prime Minister Yves Leterme,
who currently holds the rotating presidency of the European Union.

“The main priorities in this area should be: broader surveillance
of economic policies, a system of gradual penalties and sanctions in
case of repeated indiscipline, the incorporation of European debt and
deficit rules into national law and reforms of regional and local
fiscal institutions,” the letter said.

The European Union’s rules – as set out in the Stability and Growth
Pact – stipulate that each country must limit its annual budget deficit
to 3% of its GDP, and its total debt to 60%. The European Commission is
in charge of implementing those limits but doesn’t have the political
clout or instruments to do so effectively.

Blatant flouting of the rules by some countries led to a sovereign
debt crisis in May this year, as investors worried that some countries
had run up such large debts that they ran the risk of defaulting.

European Council President Herman Van Rompuy is leading a task
force to recommend ways to improve economic governance in the 27-state
bloc but the idea of enshrining the EU budget rules into national law
is unlikely to prove very popular as many of the EU’s members oppose
ideas which they see as an infringement of their national sovereignty.

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

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