The Council of the European Union have agreed on a package of measures aimed at strengthening economic governance in the EU and euro area.
The agreement would enhance budgetary discipline imposed on member states and would broaden the surveillance from the EU of their economic policies. A specialised economic task force, headed by Herman Van Rompuy, outlined the need for increased economic coordination.
Proposals include reform of the EU’s Stability and Growth Pact including enhancing the surveillance of fiscal policies, introducing provisions on national fiscal frameworks, applying enforcement measures for non-compliant member states. Both preventive measures, in the form of expenditure benchmarks, and corrective measures in the form of financial sanctions are included in this package.
Other proposals focus on macroeconomic imbalances in the EU, which could mean the possibility of a member state being required to conduct a corrective action plan within a specified time-frame. Should this be adhered to and the imbalance no longer excessive – the Council may then close the case. On the other hand, sanctions, in the form of fines, would be imposed should the state remain non-compliant with the recommendations and for those found to be in an “excessive imbalance position”.
Negotiations will now begin with the European Parliament and a goal of June has been set to finalise agreements.