Saturday

21st Oct 2017

EU holds first meeting on joint economic governance

  • Mr Van Rompuy: Financial markets will be closely following the 5pm press conference (Photo: Council of the European Union)

EU finance ministers and treasury officials are gathering in Brussels on Friday (21 May) to debate tighter co-ordination of fiscal policy in the wake of the Greek debt crisis.

EU Council President Herman Van Rompuy is to chair the meeting of the special "task force," which will present a preliminary report in time for the regular EU summit on 17 June in a paper that may suggest changes to the EU treaty.

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.

Germany on Thursday floated a nine-point plan for the reforms, with finance minister Wolfgang Schauble saying in the preamble to his text that Berlin wants to go beyond previous ideas tabled by the European Commission on 12 May.

"In our view, the vast majority of these suggestions go along the right lines. However, we believe that some of the measures need to be taken further," he said.

The German plan envisages a new body to "rigorously" examine national stability programmes, a job previously done by the European Commission. "The examiner could be the European Central Bank, or a specially appointed group of independent research institutions," Berlin said.

It added that national parliaments should play a key role in fiscal planning, after Austria, Sweden and the UK objected to the commission's 12 May proposal that EU governments should peer-review budgets before MPs get their say.

Countries which flout EU stability rules should "in extreme cases" lose EU structural fund payments and "have their voting rights in the Council suspended for at least one year."

Mr Schauble's plan does not speak of Germany's previous ideas on creating a European Monetary Fund to save countries at risk of bankruptcy or of measures for insolvent states to exit the eurozone. It says instead that "a procedure for orderly state insolvencies will have to be an integral part of any fixed crisis-resolution framework for the euro area."

"It is a very difficult question how to define insolvency for a member state of the eurozone. So far, I haven't seen any convincing model, but we need one. That is why we put it on the agenda of the task force," Mr Schauble told reporters in Berlin on Thursday.

In a sign that France is happy for Germany to take the lead, President Nicolas Sarkozy buried the hatchet with German Chancellor Angela Merkel in the run-up to the task force debate.

"There could not be a disagreement between Germany and France on subjects of such importance," he told press after a meeting with the new British leader, David Cameron, in Paris on Thursday. "I myself proposed a suspension of voting rights [for EU fiscal miscreants]," he added, recounting a phone conversation with Ms Merkel.

His remarks came after French finance minister Christine Lagarde had earlier attacked Germany over its surprise decision to ban "naked short-selling" - a form of speculative trading.

The EU last week already agreed to set up an "ad hoc" €750 billion bail-out fund for embattled eurozone economies covering the next three years, with the Bundestag set to vote on Germany's contribution to the mechanism on Friday.

The task force measures are designed to put EU finances on a more stable footing for the long-term, amid fears that major economies such as Spain and Italy are also heading for a Greek-type catastrophe.

The financial markets will be closely following what comes out of Friday's discussion, with Mr Van Rompuy set to announce results at 5pm Brussels time.

The euro on Thursday continued to trade near a four year low against the dollar, as markets digested Ms Merkel's comment on Wednesday that the single currency is facing an "existential crisis."

CORRECTION: The article previously stated that member states had suspended voting rights against Austria in 2000 when it elected an out-and-out far-right politician, the late Jorg Haider, to government. In fact, they suspended bilateral relations only.

Macron puts trade policy on summit table

France's president wants a "political discussion" on EU trade policies at Thursday's summit, amid domestic concerns over Canada and South America deals. But his colleagues are likely to avoid a lengthy debate.

News in Brief

  1. Rajoy to trigger Article 155 on Saturday in Catalan crisis
  2. EU conducts unannounced inspection of German car firm
  3. Lithuania calls for new EU energy laws
  4. EU leaders aim for December for defence cooperation
  5. Juncker says hands tied on Russia pipeline
  6. Czechs set to elect billionaire Andrej Babis
  7. Italian regions hold referendums on more autonomy
  8. EU leaders refuse to mediate Catalonia conflict

Stakeholders' Highlights

  1. Mission of China to the EUPresident Xi Jinping Proposes Stronger Global Security Governance at Interpol Assembly
  2. European Friends of ArmeniaEU Engagement Could Contribute to Lasting Peace in Nagorno-Karabakh
  3. UNICEFViolence in Myanmar Driving 12,000 Rohingya Refugee Children Into Bangladesh Every Week
  4. European Jewish CongressBulgaria Applauded for Adopting the Working Definition of Antisemitism
  5. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  6. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  7. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  8. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  9. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  10. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  11. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  12. CECEE-Privacy Regulation – Hands off M2M Communication!

Latest News

  1. The mysterious German behind Orban's Russian deals
  2. Mogherini urged to do more on Russian propaganda
  3. Turkey funding cuts signal EU mood shift
  4. Posted workers top EU agenda This Week
  5. Leaders lobby to host EU agencies at summit's margins
  6. Legal tweak could extend EU control on Russia pipeline
  7. Ukraine language law does not harm minorities
  8. EU begins preparations for Brexit trade talks