Sunday

4th Jun 2023

Bumpy ride for fiscal compact in Dublin, Prague, Helsinki

  • The Finnish government faces a vote of confidence on Wednesday (Photo: IaRRoVaWo)

The EU’s new fiscal compact is again getting a bumpy ride from a number of quarters in member states, with opposition parties in Ireland warning over loss of sovereignty and the leaders of the Czech Republic and Finland also underlining concerns.

In non-eurozone Prague on Tuesday, Prime Minister Petr Necas stressed to reporters that the government must wait for full details of the new agreement, which calls for tighter fiscal discipline and monitoring of budgets by the EU, before it can sign up to it.

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

"Our position has been absolutely clear -- we won't pledge to join the deal unless its parameters are known," he said.

The leader added that the country’s central bank should not be the actor that takes the decision on whether to chip in to the planned €200 billion loan to the International Monetary Fund, which would then be loaned on to eurozone states.

"I personally think the Czech Republic should not take part" he added, although the governing coalition is to discuss the issue Wednesday.

In Finland on Tuesday, the prime minister, Jyrki Katainen, said that the government could not agree to a transfer of national budget sovereignty to the European Commission.

He also added that the country cannot sign off on majority-based decision making on the boards of the EU’s bail-out funds, the European Financial Stability Facility and the soon-to-be-established European Stability Mechanism.

The leader made the comments during a debate in the parliament where the head of the eurosceptic True Finns party, Timo Soini, attacked the fiscal compact as eroding Finnish budget sovereignty, according to a report from YLE.

A vote of confidence in the government is to be held on Wednesday.

In Ireland the same day, after Taoiseach Enda Kenny briefed opposition parties on the deal, both Fianna Fail and Sinn Fein said that the new rules must be put to a referendum.

The government has said that it must consult its legal advisors before saying whether such a plebiscite should be held.

Fianna Fail chief Micheal Martin, whose party in government had signed up to EU-IMF imposed austerity in return for a bail-out, honed in on balanced budget rules that would limit deficits to just 0.5 percent of GDP, saying this would require the confidence of the people before going ahead.



"This will require a referendum from a political perspective, that people be consulted on the issue given that it seems to be the intention of the European leaders to write in to either constitutional law or its equivalent,” he said.



Sinn Fein leader Gerry Adams for his part also attacked the 0.5 percent ceiling.



"The government has signed up to a new and draconian 0.5 percent of GDP deficit limit. They have done this without having conducted an assessment of the social or economic consequences of such a move,” he said.


Separately on Tuesday, the honeymoon period for the technocrat government of Mario Monti came to rapid end, with Italian unions launching a week of strikes against his €33 billion austerity package.

Rolling strikes in different sectors, which enjoy for the first time in six years joint co-ordination between the normally bitterly divided three main union centrals, will continue through 19 December.

EU leaders embrace 'fiscal compact' demanded by central bank

EU leaders have endorsed a series of rules tightening budget surveillance and institutionalising limits on public spending - the ‘fiscal compact’ that the ECB has demanded before it can more aggressively purchase Italian and Spanish debt.

Mixed centre-left response on need for EU referendums

Centre-left politicians in a number of key member states are of mixed opinions about what has been agreed at last week's EU summit, suggesting that endorsements by parliaments will not be an easy task

New EU deal faces multiple referendum threat

Within hours of arriving at a fragile treaty deal for the eurozone and nine other EU states, the agreement delivering deeper integration is already confronting the spectre of multiple referendums and a host of legal barriers.

ECB: eurozone home prices could see 'disorderly' fall

The European Central Bank in its Financial Stability Review warned EU home prices could see a 'disorderly' fall as high mortgage rates are making houses unaffordable for households and unattractive for investors.

Adapting to Southern Europe's 'new normal' — from droughts to floods

Extreme weather events in recent months have worsened agricultural production in southern Europe, prompting concerns for authorities in Portugal, Spain, France and Italy. As countries will likely face dryer conditions, experts urge adaptation measures for the 'new normal'.

EU: national energy price-spike measures should end this year

"If energy prices increase again and support cannot be fully discontinued, targeted policies to support vulnerable households and companies — rather than wide and less effective support policies — will remain crucial," the commission said in its assessment.

Opinion

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. Spanish PM to delay EU presidency speech due to snap election
  2. EU data protection chief launches Frontex investigation
  3. Madrid steps up bid to host EU anti-money laundering hub
  4. How EU leaders should deal with Chinese government repression
  5. MEPs pile on pressure for EU to delay Hungary's presidency
  6. IEA: World 'comfortably' on track for renewables target
  7. Europe's TV union wooing Lavrov for splashy interview
  8. ECB: eurozone home prices could see 'disorderly' fall

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us