Saturday

1st Oct 2016

Bumpy ride for fiscal compact in Dublin, Prague, Helsinki

  • The Finnish government faces a vote of confidence on Wednesday (Photo: IaRRoVaWo)

The EU’s new fiscal compact is again getting a bumpy ride from a number of quarters in member states, with opposition parties in Ireland warning over loss of sovereignty and the leaders of the Czech Republic and Finland also underlining concerns.

In non-eurozone Prague on Tuesday, Prime Minister Petr Necas stressed to reporters that the government must wait for full details of the new agreement, which calls for tighter fiscal discipline and monitoring of budgets by the EU, before it can sign up to it.

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"Our position has been absolutely clear -- we won't pledge to join the deal unless its parameters are known," he said.

The leader added that the country’s central bank should not be the actor that takes the decision on whether to chip in to the planned €200 billion loan to the International Monetary Fund, which would then be loaned on to eurozone states.

"I personally think the Czech Republic should not take part" he added, although the governing coalition is to discuss the issue Wednesday.

In Finland on Tuesday, the prime minister, Jyrki Katainen, said that the government could not agree to a transfer of national budget sovereignty to the European Commission.

He also added that the country cannot sign off on majority-based decision making on the boards of the EU’s bail-out funds, the European Financial Stability Facility and the soon-to-be-established European Stability Mechanism.

The leader made the comments during a debate in the parliament where the head of the eurosceptic True Finns party, Timo Soini, attacked the fiscal compact as eroding Finnish budget sovereignty, according to a report from YLE.

A vote of confidence in the government is to be held on Wednesday.

In Ireland the same day, after Taoiseach Enda Kenny briefed opposition parties on the deal, both Fianna Fail and Sinn Fein said that the new rules must be put to a referendum.

The government has said that it must consult its legal advisors before saying whether such a plebiscite should be held.

Fianna Fail chief Micheal Martin, whose party in government had signed up to EU-IMF imposed austerity in return for a bail-out, honed in on balanced budget rules that would limit deficits to just 0.5 percent of GDP, saying this would require the confidence of the people before going ahead.



"This will require a referendum from a political perspective, that people be consulted on the issue given that it seems to be the intention of the European leaders to write in to either constitutional law or its equivalent,” he said.



Sinn Fein leader Gerry Adams for his part also attacked the 0.5 percent ceiling.



"The government has signed up to a new and draconian 0.5 percent of GDP deficit limit. They have done this without having conducted an assessment of the social or economic consequences of such a move,” he said.


Separately on Tuesday, the honeymoon period for the technocrat government of Mario Monti came to rapid end, with Italian unions launching a week of strikes against his €33 billion austerity package.

Rolling strikes in different sectors, which enjoy for the first time in six years joint co-ordination between the normally bitterly divided three main union centrals, will continue through 19 December.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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