Brussels, 06/01/2012 (Agence Europe) - The question of exactly what the European Commission's role will be in ensuring respect of the new budget treaty was the focus on the working group discussions on Friday 6 January 2012. The latest version of the draft international treaty is reported to mark a great change by suggesting that the Commission should be given the power to send a country to the European Court of Justice. The December draft only stated that the parties to the treaty (all EU countries apart from the United Kingdom) would have the right to take a case to the European Court of Justice. The subsequent court ruling would be binding on all concerned and any country found guilty of breaking the rules would have to change its behaviour within a deadline set by the court.
The idea of giving the European Commission the power to ensure the treaty is properly implemented leaves a bad taste in the mouth of some countries, with a diplomat of a big eurozone member state commenting that countries had absolutely no desire to see the Commission in this role and such an eventuality had not been discussed at the December summit. The diplomat said that giving the Commission such powers could well set the talks back six months and make it impossible to meet the 31 January 2012 deadline.
The European Parliament is planning to do all it can to ensure the new treaty gives the EU institutions the widest possible role and has expressed grave doubts about the idea of letting member states take each other to court for failing to respect budget discipline rules. In a press release, the leader of the liberals at the EP, Belgium's Guy Verhofstadt, said it was crucial for the new treaty to be fully compatible with the Lisbon Treaty and current EU rules, and it must make full use of the Community method in terms of total parliamentary scrutiny and democratic responsibility. Verhofstadt is one of the three EP representatives on the treaty working group. Elmar Brok (EPP, Germany) points out approvingly that the EP demand that the contents of the treaty be added to the EU treaties within no more than five years had been agreed to. Brok said he was now awaiting confirmation that the treaty would not lead to the creation of any new EU institutions.
MEPs want stronger laws to be introduced into countries' constitutions (or equivalent legislation) to outlaw the running up of excessive amounts of public debt, wanting member states to set up National Debt Reduction Funds. The EP also wants to see a roadmap on moving towards the pooling of a share of eurozone nations' sovereign debt by means of stability bonds. Roberto Gualtieri (S&D, Italy) said the EP had added new provisions on the setting up of a debt relief fund, the introduction of bonds and a financial transaction tax (FTT).
The draft budget treaty was the main subject of discussion for the French president, Nicolas Sarkozy, and the Italian prime minister, Mario Monti, in Paris on Friday. Italy is concerned that the debt reduction measures will be stricter than those set out in the Stability and Growth Pact, which came into force last month and says that the recommended pace of debt reduction (by one twentieth of GDP each year) should be examined in the light of private debt levels and other relevant factors (this measure does not come into force until 2014). The two leaders were expected to discuss the plan for a FTT. France's sudden announcement that it wants an FTT by the end of this month has taken its Italian and German allies by surprise. Later in the month, Sarkozy and the German chancellor, Angela Merkel, will meet with Mario Monti in Italy to prepare for the European summit of heads of state on 30 January.
Unveiling her country's prioirities for the rotating presidency of the Council of the EU, Denmark's prime minister, Helle Thorning-Schmidt, said that Europe should make an effort on the economic growth and job creation front, which would require reforms to restore healthy public finance. She said that budget discipline was a prerequisite for winning back the confidence of the markets. (MB/transl.fl)