Friday

20th Oct 2017

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.

EU agencies defend research ahead of glyphosate vote

As the renewal of the weedkiller glyphosate is a hot potato on the EU agenda, with a vote in the Parliament on Thursday, the role of two closely-involved EU agencies has come under scrutiny.

Europeans more positive about EU, survey shows

On balance, 55 percent of British respondents said the UK had benefited from EU membership. Among all European respondents, 47 percent said their voice counted in the EU.

News in Brief

  1. Italian regions hold referendums on more autonomy
  2. EU leaders refuse to mediate Catalonia conflict
  3. Dutch PM: Brexit is 'still a bad idea'
  4. Commission to issue proposal on civil protection
  5. Tusk: 'No space' for EU intervention in Catalonia
  6. Austrian PM calls Brexit talks speed 'big disappointment'
  7. PM Muscat: journalist murder 'left a mark' on Malta
  8. Belgian PM: No crisis with Spain over Catalan remarks

Stakeholders' Highlights

  1. European Jewish CongressEJC Applauds the Bulgarian Government for Adopting the Working Definition of Antisemitism
  2. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  3. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  4. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  5. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  6. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  7. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  8. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  9. CECEE-Privacy Regulation – Hands off M2M Communication!
  10. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  11. EU2017EEEHealth: A Tool for More Equal Health
  12. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness

Latest News

  1. May on mission impossible in Brussels
  2. EU seeks to shut down sea route from Libya
  3. Digital debate will be first test of Tusk's new policy crowbar
  4. EU Parliament: EU migrant quotas do have a future
  5. EU countries praise Tusk's new summit plans
  6. Commission employs double standards in Spain
  7. Legal study sounds alarm on 'Baysanto' merger
  8. Health MEPs want to phase out glyphosate by 2020