EU finance ministers have to improve the EU's economic governance reform program agreed in the future violations of financial discipline in the EU Member States will "automatically" face punishment.

EU refuses to correct the violation of fiscal discipline

The same day, led by the strengthening of economic governance Rompuy panel held its last meeting in Luxembourg, aims to finalize the EU economic governance reform program. Van Rompuy issued after the meeting a written statement that the final meeting of EU finance ministers reached an agreement, which marks the EU to strengthen economic governance in the forward of "a big step."

The European Commission late last month to draw up a financial monitoring legislative proposals, the main contents include: strict compliance with the EU to force Member States, "Stability and Growth Pact" in the deficit should not exceed gross domestic product (GDP) of 3%, public debt shall not exceed the GDP 60%, the Union of these two indicators will be exceeded in a member of the punishment. Punishment measures are: a member of the excessive deficit will be required to hand over its 0.2% of GDP non-interest bearing deposit, and if members can not be exceeded by the European Commission's warnings and recommendations to correct, this deposit will be into a fine; on the debt exceeds the member, asking them to cut the total debt each year 1 / 20, if I can not, should be fine.

Van Rompuy said that the EU finance ministers agreed that all decisions will be punished in accordance with "reverse majority" voting system to make, is fine by the European Commission under the relevant rules to execute, no longer need to discuss the finance ministers of Member States, for violation of the European Union fiscal discipline and refused to correct the member states, the European Commission will recommend punishment, unless a majority of EU member states in order to effectively oppose, or penalties into effect automatically.

Euro group president, Juncker of Luxembourg said that in this meeting, EU finance ministers to improve economic governance framework of agreed and punishment mechanism is expected to take effect from 2012, but details have yet to continue the discussion. In fact, due to serious differences between the Member States, the Working Group's final plan may be far from the European Commission's legislative proposals.

Member States there are two main differences now. First, decide whether the punishment exceeded the member who made. European Commission in the legislative recommendations to the power held in his hands, although Germany, the Netherlands, Finland and other support to the European Commission's legislative proposals, but France, Italy and other countries insist on the punishment reserved for ministers.

Second, a warning from the members to end excessive punishment, the Member States to correct how long. In this regard, countries and uncompromising. In addition, whether and how to punish a member of the macroeconomic imbalances, the greater the differences between member states. These key issues are pushed to the discussion after the EU summit in autumn.

According to EU finance ministers reached a compromise, a State constitute a violation of the EU fiscal discipline, excessive deficit, there will be 6 months time to take corrective measures, the EU finance ministers will be a simple majority of members decided to take measures of a country the adequacy of the Member States only if they refuse will face penalties. The relatively more strict budgetary discipline started only applies to the euro zone countries and then extended to the outside of the UK all the EU member states.

European Union finance ministers also supported the establishment of an early warning mechanism to detect the potential macroeconomic risks euro-zone members, such as real estate bubble and the gap in competitiveness. In addition, the EU finance ministers also said that as an interim goal, the euro zone is necessary to establish a more effective crisis response mechanisms, to avoid the beginning of the chaos in aid to Greece, but the specific structure to be further discussion. Daily Roundup

France, Germany, the adoption of punitive measures to strengthen financial discipline in the EU

French President Nicolas Sarkozy and German Chancellor Angela Merkel, 18, in the northwestern city of Deauville, France to hold bilateral joint statement after the meeting, said France and Germany have agreed to jointly recommend the European Council to take punitive measures to strengthen the EU fiscal discipline.

The statement said that France and Germany stressed the need to strengthen and speed up EU financial supervision and coordination of economic policies, the two sides that should be taken to a wider range, more operational preventive and corrective measures of punishment, to urge the EU member states to comply " Stability and Growth Pact. "

France and Germany also found it necessary to "Lisbon Treaty" to modify, and requested the President of the European Council in March next year before the draft amendments to establish a strong mechanism of permanent crisis, and the violation of the European Economic and Monetary alliance based on the principle of suspension of voting rights of States to take punitive measures.

However, the latest proposal for France and Germany, British Prime Minister Cameron clearly shows that the British Government will not support any power assignment to the EU. Although it is not British euro membership, but EU member states, any of the "Lisbon Treaty" changes are needed after the approval of all EU member states, or even need to put to a referendum in Britain.