BRUSSELS (MNI) – EU finance ministers meeting in Poland Friday,
approved a compromise agreement on new legislation designed to play a
central role in strengthening fiscal governance and economic cohesion in
the Eurozone.
Among the measures agreed are a streamlined procedure for
sanctioning countries than run excessive fiscal or current account
imbalances that would 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.
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.
Approval of the texts, a compromise with the European Parliament,
paves the way for the legislation to be formally adopted by the
Parliament at the end of the month, and by EU finance ministers on 4
October.
–Brussels Newsroom: +32495228374; pkoh@marketnews.com
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