19th Mar 2018

EU leaders to consider eurozone budget, reform 'contracts'

  • Council meeting room: EU leaders will later this month consider giving more oversight powers on employment, pensions and social areas to the European Commission (Photo: Valentina Pop)

EU leaders meeting later this month in Brussels will try to iron out disagreements on a new eurozone banking supervisor and consider further steps to deepen the economic union, such as a eurozone budget and binding "contracts" on reforms.

According to draft guidelines discussed on Wednesday (3 October) by EU ambassadors for the summit conclusions on 18-19 October, member states should consider "individual contractual arrangements with the European level on the reforms they commit to undertake and their implementation."

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.

The idea, although controversial, is not new. Germany has long fought to have more supervision of national decisions on budgets, labour market reforms, pension schemes or retirement age in member states.

It sees this as a quid pro quo for its approval of the Greek, Portuguese, Irish and now Spanish bailouts, the setting up of a permanent bailout fund, and the tacit endorsement of a bond-buying scheme by the European Central Bank.

EU officials familiar with the discussions among member states say it is still too early to say whether to expect a deal at the October summit on this extra layer of supervision.

The same goes for the idea of having a budget for the 17 eurozone countries only.

"There seems to be more impetus behind it, but the most we can expect is for member states to say they are willing to explore it," one EU official told this website.

French finance minister Pierre Moscovici has already floated the possibility of a eurozone budget being used for unemployment benefits in countries under particular pressure, such as Spain where over a quarter of the workforce is out of a job.

But, said the EU source, the budget would rather needed to be 'new money' on top of the common EU budget for 2014-2020 currently being negotiated. Otherwise these negotiations risked being completely derailed.

A unanimous decision among all 27 members would be needed to allow for any non-standard use or splitting of the EU budget.

Meanwhile, the EU commission is planning to come up with its own blueprint on how eurozone budget could be achieved

One idea is to have loan guarantees on the back of the EU budget used for eurozone states only. This could be in the form of what is now the nearly exhausted European Financial Stability Mechanism (EFSM) - a €60 billion fund used for the Irish and Portuguese bailouts.

Another idea is to have "own resources" - such as a financial transactions tax - fund this eurozone-only pot.

At least nine countries have to endorse the idea for the tax to come into force. So far, only Germany, France and Austria have written to the commission in support of it.

The commission blueprint is only expected to be issued after the October summit, but before a November meeting of EU leaders aimed at sealing a deal on the next EU budget for 2014-2020.

Parliament backs €9 billion EU budget hike

MEPs defied calls by national governments to rein in EU budget spending on Thursday, instead restoring most of the €138 billion settlement proposed by the European Commission for the 2013 budget.

UK threatens to veto EU budget

British conservative Prime Minister David Cameron has said he will block the upcoming EU seven-year budget cycle if it goes against UK interests.

Stakeholders' Highlights

  1. Counter BalanceConmtroversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  2. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  3. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  4. Martens CentreEuropean Defence Union: Time to Aim High?
  5. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  6. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  7. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  8. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  9. EPSUWill the Circular Economy be an Economy With no Workers?
  10. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  11. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  12. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework

Latest News

  1. EU states pledge solidarity with UK on alleged Russian attack
  2. 'Decisive step' in Brexit ahead of EU summit
  3. Moria refugee camp is no place for people
  4. No free EU wifi for UK cities without Brexit deal
  5. Selmayr case symptomatic, warns EU novel author
  6. Germany: Russia is 'partner' despite alleged UK attack
  7. Kiev wants EU sanctions on former German chancellor
  8. North Korea: time to put the 'E' in engagement