Ministers to discuss budget surveillance plan

Finance ministers to debate enhanced budgetary surveillance proposal.

National finance ministers are to hold their first discussion on the latest set of economic governance proposals, designed to give the European Commission greater power of intervention in eurozone member states’ budgets.

When all 27 finance ministers meet in Brussels on Tuesday (24 January), it will be their first opportunity to debate the enhanced budgetary surveillance rules proposed by Olli Rehn, the European commissioner for economic and monetary affairs, on 23 November.

The Commission and member states are hoping for rapid adoption of the rules, which build on the ‘six-pack’ of economic governance legislation that came into force on 12 December. Officials do not expect significant disagreement among member states, and they hope that agreement will be reached at the subsequent meeting of finance ministers, on 21 February.

The proposals are also expected to move quickly through the European Parliament, with a vote in the economic and monetary affairs committee scheduled for 30 May.

Disagreements

MEPs and member states are hoping to avoid a repeat of the drawn-out negotiations on the six-pack, which were blighted by disagreement over the level of automaticity of sanctions and the role of the Parliament. Even after MEPs and the Council had agreed their respective positions on the six-pack, it took some five months for consensus to emerge.

The latest proposals would strengthen the Commission’s role in monitoring draft budgets of eurozone countries, so as to ensure that they are on track to correct excessive deficits. The Commission would also obtain the right to issue an opinion on member states’ budgets and request that drafts be revised if they do not comply with the stability and growth pact.

An additional regulation would give the Commission the power to judge whether a eurozone country was in severe financial difficulty and should be subject to enhanced surveillance. This in turn would give the Council the authority to ask a member state to request financial assistance.

Finance ministers will also discuss the decision taken by the Commission on 11 January to take action against Hungary for failing to take effective steps to correct its excessive deficit under the stability and growth pact.