Thursday

21st Jun 2018

Brussels' new budget powers draw first rebuke

  • Belgian Prime Minister Elio Di Rupo (c) - the commission's warning was a rude awakening for his new government (Photo: fotospresidencia5)

The European Commission's sweeping new powers in budgetary oversight drew its first criticism on Thursday (12 January), when a Belgian minister said the EU institution lacks the democratic legitimacy to alter national spending plans.

"The commission is today going too far with its measures. Who knows [economic affairs commissioner] Olli Rehn? Who knows where he has come from and what he has done? Nobody. Yet he tells us how we should conduct economic policy. Europe has no democratic legitimacy to do that," Belgian enterprise minister Paul Magnette said in an interview with Flemish newspaper De Morgen.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

He said Belgium accepts that it has to get its budget deficit under the three percent of GDP required by euro rules, but "the margin to determine how we do it must remain free."

Philippe Maystadt, also a Belgian and the former head of the European Investment Bank, made similarly critical remarks the day before. He said the commission lacked the legitimacy and efficiency to directly penalise a member state for its budget.

The commission caused a flurry in Belgian political circles over the weekend by warning that the country needed to curb this year's spending. Rehn suggested the government's calculations that the budget deficit for 2012 would be 2.8 percent were too optimistic and asked for a cut of between €1.2 billion and €2 billion.

Belgium eventually settled on freezing €1.3 billion in spending, a move that saw it escape the threat of monetary sanctions on Wednesday (11 January) when the commission assessed the matter.

But the country's run-in was a foretaste of what is to come under the new rules - in place since mid December - designed to stop the eurozone debt crisis from being repeated.

The rules require countries to submit their annual budgets to the commission for review with fines of up to 0.2 percent of GDP for breaches of the deficit limits.

Hungary - a non-euro member - was on Wednesday told it could lose millions of euros in EU funds if it does not toe the budget line.

Although the so-called six-pack of laws went through the ordinary legislative channels in Brussels - with much back and forth between MEPs and member states about the nature of the sanctions system - commission officials and others have long warned that the power of the rules has been underestimated.

Underlining the point earlier this week, Rehn said that this year would see a "profound transformation" in economic governance.

Responding to Magnette's criticism, a commission spokesperson Thursday said: "We held a democratic debate on this with the European Parliament and the 27 governments of the EU, including the Belgian government."

"The European Commission does not have a political agenda when it tries to apply its rules. Its decisions are based on rigorous economic analysis."

Parliament approves economic governance ‘six-pack’

After almost a year since the European Commission first proposed a package of laws radically centralising economic decision-making in the European Union, the legislative process approving the so-called ‘six-pack’ of bills has finally come to an end with the European Parliament giving its assent on Wednesday.

Stronger budgetary surveillance laws up for agreement

Member states are next week set for a first agreement on laws that would strongly increase Brussels' power over eurozone national budgets - but a clause that would have essentially forced a country to take a bailout has been removed.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

Opinion

Europe could lose out in North Korean bonanza

South Korean businesses including Hyundai and Samsung are already scoping investment opportunities. Will North Korea become a 'new Vietnam' opportunity - or more like Myanmar, where slow Brussels policy-making meant EU exporters lost out.

News in Brief

  1. PES to announce 'spitzenkandidat' names in October
  2. Macedonian parliament ratifies name deal
  3. EU to hit US with import duties from Friday
  4. Commission: New on-road CO2 test would take years
  5. Juncker orders migration 'mini-summit' on Sunday
  6. Luxembourg gave illegal state aid to energy firm
  7. Negotiators lower finger printing age of refugees to six
  8. EU to lift its internal data storage barriers

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  3. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  4. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  5. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  6. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  7. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  8. Mission of China to the EUChina: Work Together for a Better Globalisation
  9. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  10. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  11. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  12. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network

Latest News

  1. How to get around the EU posted workers directive
  2. EU needs comprehensive 'sexuality education'
  3. Fate of EU refugee deal hangs in the balance
  4. Merkel, Macron in pre-summit pledge on migration, eurozone
  5. Hungary to push ahead with 'Stop Soros' law on NGOs
  6. Swedish party puts EU referendums back in fashion
  7. EU summit set to outsource asylum
  8. Dutch request to clarify Brexit Britons' rights annulled

Join EUobserver

Support quality EU news

Join us