Brussels, 08/09/2011 (Agence Europe) - There is no lack of ideas about how to boost economic governance in the eurozone. Following the Franco-German ideas mooted in August, which have been widely commented upon by other member states, it is now the turn of the Netherlands, which has suggested a radical solution which might apply first to Greece because of the problems it is facing. In a letter to Dutch parliamentarians and in an article in the Financial Times of Thursday 8 September, the Dutch prime minister, Mark Rutte, and the Dutch finance minister, Jan Kees de Jager, say that the sanctions on eurozone countries that repeatedly break EU budget and economic surveillance rules should include, as a last resort, being thrown out of the euro. They say this would require changes to be made
to the European treaty and cannot therefore be considered in the short or medium-term.
The Dutch politicians say that the main cause of the current problems is the fact that some countries had flouted the budget discipline rules, with other countries letting them get away with it. To ensure that member states stick to the rules, rules which remain appropriate, they call for independent supervision overseen by a European budgetary discipline commissioner who should be given powers comparable to or higher than those of the competition commissioner. Countries infringing the stability and growth pact would be required by the new budgetary discipline commissioner to introduce corrective measures and pay penalties (removal of EU funding and having to contribute more to the EU budget). Following this, the commissioner would have the power to scrutinise the country's budget (before the country's parliamentarians get to see it) and the country could see its voting rights withdrawn. Rutte and de Jager say that in the future, the ultimate penalty would be forcing the country out of the eurozone, but as this would require changes to the treaty, it would be a longer-term measure.
“Neither an exit nor an expulsion from the eurozone is possible under the Lisbon Treaty. Participation in the euro is irrevocable. No discussion on this eventuality. Provision of financial assistance has always been linked to strong conditionality”, commented a spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn. He said that there was nothing new in the warning given on Thursday on German radio by the German finance minister Wolfgang Schäuble that Greece had to decide whether it wanted to meet the criteria for being part of the eurozone, adding that there were always strict requirements attached to financial aid packages. On economic governance in Europe, Rehn's spokesperson said that the first thing to do was to fully implement all the decisions taken on 21 July about the second Greek bailout, giving the EFSF bailout fund greater teeth and finalising the negotiations over changes to the stability and growth pact. On the latter point, the spokesperson said that encouraging signs were emerging at the European Parliament, with the EP negotiators and the Polish Presidency of the Council of Ministers reportedly reaching agreement on the final outstanding issue in the package of draft legislation, namely more automatic penalties for countries infringing the stability and growth pact (see EUROPE 10447). (M.B./transl.fl)