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26th Sep 2022

EU summit draft backs 'separate' eurozone budget

  • EU notables celebrate Estonia's euro-adoption in 2010 (Photo: ec.europa.eu)

Member states are warming to the idea of having a eurozone budget on top of the joint EU budget, with the latest draft conclusions ahead of next week's summit clearly separating the two.

Dubbed "fiscal capacity," the new budget "would be specific to the euro area and therefore not to be covered by the Multiannual Financial Framework," the EU's common, seven-year budget, the draft prepared by EU Council chief Herman Van Rompuy says.

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The latest wording on the idea of a eurozone budget, which was already floated in June, is an indication that consensus is building around the move in member states, provided it does not affect the current negotiations on the EU budget for 2014-2020.

Even for non-euro countries - which are usually wary of creating a "two-speed" Europe - the idea is becoming acceptable as long as it does not mean less money in the common pot.

Polish EU minister Piotr Serafin told Gazeta Wyborcza on Wednesday (10 October) that his country "does not fear a eurozone budget" as it would be separate from the joint EU fund.

"Moreover, we are not talking about something that will happen on 1 January. The idea is not very mature and it is difficult to imagine that such a mechanism would begin to work ... by 2014," he added.

Serafin also noted that there is no clarity for now on how the extra budget would be used.

"Definitely it would have to be somehow related to economic policy and competitiveness in the euro area. Discussions on this topic will not end quickly," he predicted.

Meanwhile, the UK, which is pushing for a reduction in the common EU budget, has also spoken in favour of a separate eurozone fund.

"There will come a time when you need to have two European budgets, one for the single currency, because they are going to have to support each other more, and perhaps a wider budget for everybody else," British Prime Minister David Cameron told the BBC on Sunday.

More parliamentary debates

The latest draft conclusions also reflect discussions with the European Parliament on the future architecture of the eurozone, with more details included in the part on democratic scrutiny.

"In this spirit, ways to ensure a debate in the European parliament and in national parliaments on the Country Specific Recommendations [economic policy guidelines issued for each member state by the EU commission] adopted in the context of the European semester [increased co-ordination of economic policies] should be explored. The role of the social partners should also be enhanced," the text says.

EUobserver understands that one of the ideas on how to achieve extra parliamentary scrutiny is to have EU commissioners go to national parliaments for hearings.

Another idea is to have more ministers from member states appear in the European Parliament to explain tax or labour market reforms under way in their countries.

Eurozone needs 'limited fiscal solidarity'

The eurozone should consider introducing treasury bills, a special budget and a finance ministry, says a new ideas paper ahead of next week's summit.

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