Friday

21st Jul 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 and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  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.

Greece to get €7.7bn loan next week

The ESM, the eurozone emergency fund, agreed on Friday to unblock a new tranche of aid as part of the bailout programme agreed upon in 2015.

Opinion

Greece needs a new plan

Two years into its third bailout, Greece needs to combine the necessary fiscal targets with a new vision. This can be done in the context of the ongoing industrial revolution.

Opinion

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

News in Brief

  1. Polish parliament adopts controversial justice reform
  2. GMO opt-out plan unlikely to go anywhere in 2017
  3. Slovak PM threatens to boycott inferior food
  4. France takes Google's 'right to be forgotten' to EU court
  5. Turkey accuses German companies of supporting terror
  6. Israel's Netanyahu caught calling EU 'crazy'
  7. UK does not collect enough data to expel EU nationals
  8. Polish president threatens to veto justice reform

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School

Latest News

  1. Dutch coalition talks lengthiest in 40 years
  2. Polish parliament steps up showdown with EU
  3. EU urges UK to clarify its Brexit positions
  4. Law expert: direct EU powers have become too complicated
  5. Winter is here for Spitzenkandidat, but he'll survive
  6. Mafia money pollutes the EU economy
  7. Central Europe should be wary of Brexit stopping
  8. Poland's 'July coup' and what it means for the judiciary