Brussels, 28/02/2012 (Agence Europe) - The draft report by Elisa Ferreira (S&D, Portugal) on one of the two items of draft legislation adjusting the stability and growth pact changes the deadlines for member states to prepare their draft budget for the following year. National parliaments will have until 1 October each year to submit their budget plans to the European Commission, which will then have until 1 November to analyse the budget plans, discuss them with the government of the country in question and request changes, where necessary. The European Commission would have until 1 December to issue a public opinion (report) on the budget plans.
In the initial draft, the European Commission suggested mid-October as the deadline for submission of national budgets (see EUROPE 10501). The agreement in principle reached by the Council of Ministers last week did not alter this deadline. Ferreira said on Tuesday 28 February 2012 as she unveiled her draft report (discussed for the first time that day by the European Parliament's economic and monetary affairs committee) that she had brought forward the date from 15 October to 1 October, because it is not possible for the Commission to read, assess, discuss with national parliaments and publically criticise countries' draft budgets all in a fortnight, adding that the Commission and member states would need to enter dialogue if the process were to work.
Other changes recommended in the draft Ferreira Report include a rebalancing of powers, giving the Commission the key role. The report includes measures to encourage economic growth. It mentions the issuing of eurobonds as a means of displaying budget solidarity and demands the immediate establishment of a redemption fund to manage the debt of eurozone nations above 60% of GDP (see EUROPE 10528).
Legal protection for struggling countries. Jean-Paul Gauzès (EPP, France) has unveiled a draft report on the other item of draft legislation amending the stability and growth pact (see EUROPE 10552). He says that the European Commission's draft legislation was broadly satisfactory and the only real change he has made to the Commission's ideas is the addition of a measure inspired by private law whereby a member state risking imminent default on its debt would be granted legal protection similar to that which companies receive when in receivership. He said one had to take a logical approach and stop moving from one crisis to another (like with Greece) - when all measures fail and a country is on the brink of bankruptcy, then this is the start of a new situation. He admits that adding such a measure to EU law amounts to denial of the European summit's claim that Greece was a one-off, but wondered whether Europe's leaders believed what they said. Gauzès said that giving struggling countries legal protection would give them time to breathe, introduce reforms and return to growth. He added that there would be three direct consequences of such legal protection - bond maturity dates would be frozen, the interest rates on bonds would not change and the country's debtors would need to make it clear how much is owing to them. (MB/transl.fl)