Saturday

19th Oct 2019

Trichet defends discipline of euro pact

The President of the European Central Bank, Jean-Claude Trichet, has issued a strong warning against changing the euro rules to allow countries that break the pact to slip off the hook.

Speaking in Frankfurt on Thursday (3 February), after an ECB meeting at which interest rates were left at the historically low level of 2 percent, Mr Trichet insisted that the so-called "corrective arm" of the euro rules should remain untouched.

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.

... or join as a group

The rules state that EU member states must not run a budget deficit higher than three percent of gross domestic product (GDP). If countries break the rules, they are subject to a disciplinary procedure which in theory could lead to large fines – this is the "corrective" part of the Stability and Growth Pact.

"As regards the corrective arm of the Pact, the mechanisms in place must remain strong and credible in all respects", said Mr Trichet.

"It would therefore be counterproductive to change the Regulations, dilute the three percent deficit limit or weaken the excessive deficit procedure", he added.

He concluded that the ECB was "very attached" to the Stability and Growth Pact but recalled that it was down to the European Commission and the member states to take the final decision on reforming the euro rules.

However, he said that he was "fully on board" with proposals to reform the so-called "preventive" arm of the Pact.

The Commission has set out proposals to ensure that member states do more to save money during periods of strong economic growth to prevent excessive deficits in economic slowdowns.

"In that period [of strong economic growth], you have to put aside what is necessary to weather what happens when you are in difficult times", declared Mr Trichet.

Member states hope to achieve agreement on reforming the euro rules at their Spring economic summit in March.

US to put tariffs on European whiskies, cheese

After a 15-year legal battle, the US was given the green light to impose tariffs on EU products. The EU is threatening countermeasures but wants to negotiate. Transatlantic ties have suffered another blow.

News in Brief

  1. Macron: Nato's inability to react to Turkey a 'mistake'
  2. EU: US can expect counter measures after tariff move
  3. Almost 7,500 people forcibly returned to Libya in 2019
  4. Puigdemont released after responding to arrest warrant
  5. Commission: Facebook's Libra needs international approach
  6. Italian PM: denial of accession talks a 'historic mistake'
  7. Catalan president blames clashes on 'infiltrators'
  8. US imposes €6.7bn new tariffs on European products

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of MinistersBrussels welcomes Nordic culture
  2. UNESDAUNESDA appoints Nicholas Hodac as Director General
  3. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  4. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  5. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  6. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  7. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  8. Nordic Council of MinistersNo evidence that social media are harmful to young people
  9. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  10. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  11. Nordic Council of MinistersEducation gets refugees into work
  12. Counter BalanceSign the petition to help reform the EU’s Bank

Join EUobserver

Support quality EU news

Join us