Negotiators finalise broad outline of EU fiscal treaty
Negotiators from 26 member states have reached broad agreement on the new fiscal treaty, paving the way for a formal agreement by EU leaders at the end of the month.
EUobserver understands that the role of the European Commission will be kept as stated in the latest draft - it is to have "reporting" powers rather than being able to take deficit sinners to court over failure to enshrine a "golden rule" on balanced budgets in their constitution or other long-term-binding legislation.
Dear EUobserver reader
Subscribe now for unrestricted access to EUobserver.
Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.
- Unlimited access on desktop and mobile
- All premium articles, analysis, commentary and investigations
- EUobserver archives
EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.
♡ We value your support.
If you already have an account click here to login.
A previous draft put forward earlier this month had said the commission could take countries to the European Court of Justice "on behalf" of other members.
But this was deemed "inconsistent with the treaties", one source told this website.
Ideally, EU leaders could sign the new treaty at a summit at the end of January - a development called for by European Central Bank chief Mario Draghi on Thursday.
"It would be highly welcomed if the fiscal compact was signed by the end of January rather than March as currently envisaged," he said in a press conference in Frankfurt.
The outstanding issues are to be ironed out by a final session of the treaty working group and a follow-up meeting by finance ministers in the run-up to the summit.
But translation into all the signatories' national languages is likely to delay the signature until March - as originally planned - enabling leaders to announce a political agreement only at the January summit.
Questions remain over the effectiveness of the intergovernmental treaty, which is designed to be included in EU law in the next five years if the UK drops its veto.
The new treaty is to impose automatic sanctions for countries which breach rules requiring budget deficits to be kept below 3 percent of GDP and debt levels below 60 percent of GDP, as well as keeping a "structural deficit" below 0.5 percent.
One of the outstanding issues is the precise method of calculating this "structural deficit". Denmark, for instance, whose welfare state constantly runs a budget deficit, has a problem with the EU commission algorithm.
"The structural deficit is not something real, it is a sum, so it is important to know how you calculate it. We would like to adhere to the norm 'comply or explain' rather than adopting the EU commission method," Danish economy minister Margrethe Vestager told journalists on Tuesday in Copenhagen.