Tuesday

28th Jan 2020

Finance ministers cautious over budget proposals

  • Brussels is calling for greater budgetary scrutiny (Photo: Generation X-Ray)

EU finance ministers meeting in Madrid over the weekend (16-18 April) expressed caution regarding upcoming European Commission proposals on greater budgetary surveillance.

Under the plans, to be presented in full on 12 May, euro area member states and the commission would engage in a system of "peer review" so that national budgets would be subject to "systematic and rigorous assessments," before then being passed on to national parliaments for approval, explained EU economy commissioner Olli Rehn.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

"Remedial actions" would then be taken if necessary, the Finnish politician told the gathering of European financial heavyweights, drawing support from Luxembourg's Prime Minister Jean-Claude Juncker.

"It makes sense to discuss among the finance ministers the broad lines of the budget before these budgets are introduced in the parliamentary procedure," said Mr Juncker, who chairs the monthly meetings of eurozone finance ministers.

A number of other member states were more cautious however, concerned that plans could erode national parliamentary control over domestic budgets.

Joerg Asmussen, Germany's deputy finance minister, said it was "quite clear that national budget authority has to remain unrestricted, although we are obviously subject to the rules of the Stability and Growth Pact."

The pact, a system of rules limiting EU deficits to three percent, has been widely flouted by member states in recent years, leading to the current fiscal difficulties seen in several European countries, in particular Greece.

Spanish finance minister Elena Salgado, whose country currently holds the EU's rotating presidency, was also muted in her support for the commission's budgetary proposals, again highlighting the need to preserve the role of national parliaments.

"They are not going to substitute the decisions made by national parliaments," she said. "Nation states are complicated and budgets are complicated."

Bank levy

The creation of a bank levy that could create reserve funds for future bail-outs was also among the ideas discussed by the finance meeting, which included central bankers.

The swathe of European bank rescues which followed the financial crisis, largely funded by the taxpayer, has lead to growing calls for the industry to stump up for some of the costs.

The meeting's attendees failed to agree on a specific measure however, despite a broad consensus that the EU needs to find a better way to deal with aid to the banking sector.

European Central Bank President Jean-Claude Trichet said the idea of a bank levy called for "prudent steps," while Mr Rehn said further discussion was needed.

Ms Salgado warned that a "level playing field at the international level" would be required if the idea was to work, adding that the creation of an emergency cash reserve could lead to banks increasing their risky behaviour.

Sarkozy and Merkel keen to show united front ahead of summit

In time-honoured EU tradition, the leaders of France and Germany have tried to present a united front ahead of a euro area leaders' meeting on Friday, despite major differences in opinion on how to deal with the Greek crisis.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

EU agrees 2020 budget deal

EU governments and the parliament agreed in marathon talks ino next year's budget - which will boost spending on climate, border protection, and the European satellite system. It will also be a benchmark if there is no long-term budget deal.

EU and China agree to defend 'gastronomic jewels'

Manchego cheese, Panjin rice and Polish vodka will all be protected under a new EU-China agreeement. But the two trading giants continue to struggle over other trade-related deals.

News in Brief

  1. Cases of coronavirus in France and Germany
  2. Report: EU court seeks authority on post-Brexit deal
  3. Slovenian PM resigns, calls snap election
  4. Merkel wants EU-Balkan talks agreement by March
  5. Germany: UN sanctions to enforce Libya ceasefire
  6. Irish PM: UK weaker than EU in trade talks
  7. Report warns of challenges under new EU telecom rules
  8. EU countries to evacuate citizens from virus-hit Wuhan in China

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

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 Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. 'Brexit is not going to go away,' warns EU's Barnier
  2. Belgian spy services launch internal clear-up
  3. US and UK in war of words over Huwaei
  4. How Slovakia's far-right might pull off an election victory
  5. Trump's 'plan' for Israel will go against EU values
  6. Salvini down, but not out in Italy regional poll
  7. Brexit finally happens - the UK leaves the EU This WEEK
  8. Why is Netherlands so far behind on renewables?

Join EUobserver

Support quality EU news

Join us