Monday

11th Dec 2023

Deal reached on EU economic governance laws

After months of fraught negotiations, a deal has been reached on six new laws - the so-called Six-Pack - designed to keep eurozone member states' budgets in check and to prevent a repetition of the current debt crisis.

The agreement, hammered out by European Parliament and Polish EU presidency and European Commission officials late on Wednesday (14 September), still has a few formalities to complete before it becomes EU law.

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

It will come up for discussion by eurozone finance ministers at an informal gathering in Poland, beginning Friday. A final meeting of parliament, presidency and commission delegates is expected Monday to tie up loose ends. MEPs will then vote on the agreement in a plenary session at the end of September.

Under the deal, sanctions for countries that run up an excessive budget deficit will become easier to impose, though are not as automatic as some in the parliament would have liked.

Deficit sinners will be subject to a two-step procedure.

The commission will first issue a warning to the country, which has to be adopted by a qualified majority of eurozone members.

If after one month the warning has either been rejected by member states or simply ignored, then the commission can insist again on the warning. This time round, however, the warning is considered automatically adopted unless a majority of eurozone states - nine - say otherwise.

The commission can eventually impose a fine of up 0.1 percent of GDP for countries not acting to correct their deficit, while those countries falsifying their statistics could see a fine of 0.2 percent of GDP.

The slightly messy compromise is the result of haggling between MEPs and governments over how automatic to make sanctions. The current system was dealt a fatal blow when France and Germany in 2003 broke the rules on keeping budget deficits under 3 percent of GDP and went unpunished.

"We have struck a realistic balance between the will of member states and what we considered necessary", said one parliamentary source.

The deal also saw new language, pushed by the Socialists and Greens in the EU assembly, forcing the commission to look at export deficits (in places such as Germany, which exports more than it consumes) as well as current account deficits (as in Greece, which imports more than it exports) when drafting macroeconomic outlooks for the eurozone.

In addition, both sides agreed that finance ministers may be invited to appear before the parliament's economic affairs committee to explain when things are going awry. The ministers can turn down the meeting, but language stressing that attendance is "voluntary" has been removed.

The agreement was welcomed by conservative deputies but criticised by those on the left.

"The compromise agreement reached makes it possible to lay solid foundations of economic governance", said French centre-right MEP Jean-Paul Gauzes.

German Socialist deputy Udo Bullmann said "It fails to provide any incentives for growth and jobs. This could actually make things worse for the European economy which is facing the risk of recession".

Green deputy Philippe Lambert said the deal falls short of what is needed to get Europe out of the crisis: "This Six-Pack will fail to provide the basis for a robust and sustainable system of economic governance for Europe."

However, although deputies may disagree on the details, the fact there is any kind of agreement is of great symbolic importance.

Its slow progress through Brussels' legislative labyrinth saw politicians fret about what markets think on the EU's ability to react to the debt crisis.

Divided EU Parliament tightens measures on economic governance

In a four-hour, at times heated meeting, MEPs toughened up the provisions in a package of six laws that centralise economic decision-making in the EU, delivering more powers for oversight of national fiscal policies to the European Commission.

Parliament approves economic governance ‘six-pack’

After almost a year since the European Commission first proposed a package of laws radically centralising economic decision-making in the European Union, the legislative process approving the so-called ‘six-pack’ of bills has finally come to an end with the European Parliament giving its assent on Wednesday.

COP28 focuses on EU failure to cut livestock emissions

This year's COP28 casts its eye on agriculture, which generates one-third of global emissions. A sector in which EU climate policies lack ambition — as even acknowledged by members of the EU delegation.

COP28 focuses on EU failure to cut livestock emissions

This year's COP28 casts its eye on agriculture, which generates one-third of global emissions. A sector in which EU climate policies lack ambition — as even acknowledged by members of the EU delegation.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Latest News

  1. EU's 'do no harm' Libya policy hit by militia revelations
  2. Final fight over oil and gas phase-out at COP28 looms
  3. How EU must follow through on Iran womens' Sakharov prize
  4. COP28 focuses on EU failure to cut livestock emissions
  5. Final EU summit of 2023 plus rule of law in Spain This WEEK
  6. Why this week's EU summit must agree a new budget deal
  7. How Moldova is trying to control tuberculosis
  8. Many problems to solve in Dubai — honesty about them is good

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

Support quality EU news

Join us