21st Mar 2018

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.

Merkel in Paris for eurozone reform talks

Angela Merkel - who started her fourth term as Germany's chancellor earlier this week - is wasting no time on big issues like eurozone reforms. On Friday she is meeting Emmanuel Macron where the two will seek common ground.

EU insists on US tariffs exemption

Europe is "an ally, not a threat", the EU Commission says - as the US is poised to impose duties in steel and aluminium. Common action on Chinese steel overcapacity could help diffuse the crisis.

VW dismisses complaints on Dieselgate fix

'I think customers who want to get information (...) are able to receive information if they want," VW management board member Hiltrud Werner told EUobserver. Consumer groups disagree.

News in Brief

  1. EU leaders expected to approve Brexit future talks guidelines
  2. Tusk: EU must 'continue to engage' with US on trade
  3. European elections set for 23-26 May 2019
  4. EU tries to find common candidate for top UN food job
  5. Facebook post triggers Norway no-confidence vote
  6. Merkel: 'no reason' to sanction Schroeder for Russia support
  7. MEPs and Council strike deal on posted workers' rights
  8. EU parliament to investigate Facebook data 'breach'

Stakeholders' Highlights

  1. EUobserverHiring - Sales Associate With 2+ Years Experience - Apply Now!
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Stakeholders' Highlights

  1. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  2. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  3. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework
  4. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  5. ECTACompetition must prevail in the quest for telecoms investment
  6. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  7. ILGA EuropeCongratulations Finland!
  8. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  9. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  10. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  11. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  12. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections