Parliament approves economic governance ‘six-pack’

The parliament emerged largely victorious in its battle with the member states, and in particular France, to give the EU executive the power to impose sanctions that can only be blocked by a majority of votes amongst eurozone states.

A majority of MEPs in the conservative-dominated chamber worried that requiring approval by the Council before warnings could be issued to a country would lead to back-room deals in which countries needing to reform their budgetary policies would be let off the hook.

In the end, a country warning will be issued if a vote in the Council is not taken within 10 days of a commission notice. If the Council decides to overturn the commission’s decision, they will now have to appear before the European Parliament and defend their rejection in public.

The chamber also won the right to request the presence of finance ministers from countries that have received a warning to a dressing down in the parliament.

The vote in the full sitting of the chamber however was close, as parties on the left voted against or abstained on some aspects of the package, believing there to be insufficient balance between market requirements and social needs.

The left however did win a victory via the parliament’s insistence that the commission consider not merely countries with high trade deficits, but also those running current-account surpluses.

Germany and the Netherlands have crowed that such imbalances result from their successful economic management and should not need investigation. However, some economists argue that the core of Europe has engaged in mercantilist policies that are the flip-side of heavy debts in the eurozone periphery and are every bit as dangerous.

The president of the parliament, conservative Polish MEP Jerzy Buzek cheered the result, declaring: "We have developed a powerful and resistant armour against any future crisis,"

Liberal MEP Sylvie Goulard, one of the deputies to shepherd the legislation through the house, said that the bloc needed to go further still in terms of economic integration.

“This is not the end of the story.  We will need to take further steps. But we have built a new system with this package today which will allow the EU institutions to work better together and will increase transparency,” she said.

The Socialists spokesman for economic affairs, Udo Bullmann, said that the vote today would have “drastic consequences” for European citizens.

“We think there exists another path out of the crisis. The reform is an austerity pact ... that leaves no margin of manoeuvre for EU states for intelligent spending and targeted investment.”

Some 78 civil society organisations including anti-poverty NGOs and trade unions issued an open letter on Wednesday denouncing the moves as anti-democratic.

“The proposals will enable EU institutions to make decisions on member states' budgets, economic policy priorities as well as on labour and social rights with little democratic debate, or accountability,” the signatories, including France’s CGT union, UK-based Tax Justice Network and Attac Denmark, to the letter said.