Wednesday

14th Nov 2018

Rehn calls for 'responsibilty' over economic rules

  • Rehn is willing to 'sacrifice' his summer holiday for the six pack (Photo: ec.europa.eu)

With the political credibility of the EU in tatters over its handling of the eurozone crisis, monetary affairs commissioner Olli Rehn has appealed to MEPs and governments' "responsibility for Europe" as they continue to haggle over laws designed to prevent such a crisis happening again.

The so-called six pack of legislation will tighten economic governance in the EU but is currently stuck in the legislative pipeline as member states and MEPs battle it out over the automaticity of sanctions for countries that exceed budget deficit and debt limits.

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A hoped-for June deadline for agreement has already been missed. The delay in reaching a deal as well as fears that the teeth will be removed from the proposal adds to the growing perception that the EU is unable or unwilling to remedy its problems.

"There should be a political agreement on it as soon as soon as possible in order to reinforce confidence in the capacity to act of the European Union and to overcome the current sovereign debt crisis," said EU monetary affairs commissioner Olli Rehn, after a meeting of EU finance ministers on Tuesday (12 July).

"It is important to the medium and short-term fiscal prudence but it is important for the perceptions of today already in the short-term."

He called on the "sense of responsibility for Europe" among MEPs and member states to reach an agreement and said he was ready to "offer some of [his] summer holiday" if needed.

While the automaticity of sanctions is the main sticking point, the parliament itself is divided over the nature of the measures. The socialists want them to contain growth-boosting elements while centre-right and liberal MEPs simply want to concentrate on cutting deficits.

"I would virtually discount an agreement in July although there have been many twists and turns in the process," one parliament official told this website.

Last centimetre

The Polish presidency, which started running the day-to-day affairs of the EU on 1 July, has indicated it is pushing to get the whole package wrapped up in one vote, "probably" in September.

"We're really down to differences in one, at most two items and it's really the last centimetre and not the last mile. However, maybe because it's just the last centimetre, it's proving harder work than one might think", said Polish finance minister Jacek Rostowski.

The rules are meant to increase Brussels' oversight of public finances in member states, after the parlous state of Greece's finances was revealed in 2010, following years of unnoticed build-up.

The commission is keen to see the rules in place with member states already grumbling about fiscal targets set by Brussels under the European semester, a new system of centralised oversight on national economic planning.

"I want to underline that today we can only encourage the member states to do so (meet their fiscal targets), but tomorrow, provided that the package of economic governance is adopted, we can also enforce our messages," said Rehn.

But still there are doubts about whether the beefed up rules will be enough.

Speaking to MEPs earlier this month, Rostowski said: "We need to develop support programmes and reform programmes of the kind that the [International Monetary Fund] does on a regular basis."

Without more comprehensive measures, "I don't think the eurozone will be the kind of strong structure that we all need it to be," he said, according to Dow Jones.

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