Wednesday

22nd Nov 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

News in Brief

  1. December euro summit still on, Tusk confirms
  2. EU calls for end to Kenya election crisis
  3. Report: Israeli PM invited to meet EU ministers
  4. French banks close Le Pen accounts
  5. Commission relaxes rules on labelling free range eggs
  6. Commission issues €34m fine over car equipment cartel
  7. Estonian presidency 'delighted' with emissions trading vote
  8. Mladic found guilty of genocide and war crimes

Stakeholders' Highlights

  1. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  2. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  3. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  4. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  5. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  6. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  7. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  8. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!
  9. Dialogue PlatformErdogan's Most Vulnerable Victims: Women and Children
  10. UNICEFEuropean Parliament Marks World Children's Day by Launching Dialogue With Children
  11. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  12. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure

Latest News

  1. Mali blames West for chaos in Libya
  2. Orban stokes up his voters with anti-Soros 'consultation'
  3. Commission warns Italy over high debt level
  4. Mladic found guilty for Bosnia genocide and war crimes
  5. Uber may face fines in EU for keeping data breach secret
  6. EU counter-propaganda 'harms' relations, Russia says
  7. The EU's half-hearted Ostpolitik
  8. Glyphosate: 1.3 million EU citizens call for ban