BRUSSELS ( Dow Jones) – The European Commission has unveiled on Wednesday a package of laws strengthening the Stability and Growth Pact. to Intended be a tougher oversight of the fiscal policies , but also the economic policies and structural reforms are more closely monitored in future. (Photo : EU)
In addition, new penalties for states are provided, which do not comply with the provisions of the Covenant. The sentences are to automatically access and can only be tilted by a qualified majority of the euro countries.
The EU Commission made in this regard six proposals . This required, however, by the EU Parliament and the European Council to be approved before they take effect.
The legislative proposals of the European Commission aimed to identify macroeconomic imbalances in the EU and the euro area and effectively to tackle . For the Member States of the euro area were the changes associated with more severe enforcement mechanisms and limits the discretion in the imposition of sanctions, says the press release.
This will include an update of the preventive arm of the Stability and Growth Pact is planned. The monitoring of public finances should be based on the new approach of " prudent fiscal policy ", into the good times to form the for bad times necessary cushion , they say. The EU Commission will issue warnings when a euro area government differs significantly from the prudent fiscal policies.
In the future euro countries lodged at the opening of an excessive deficit procedure as an interest-bearing deposit of 0.2% of gross domestic product ( GDP). These contributions are converted into a fine if the Commission’s recommendations for correcting the deficit are not followed. The sanctions are automatic and can be overridden only by a qualified majority of the European Council. So far, an explicit consent was needed.
In addition, intends to take action the EU Commission if the total debt exceeds the EU limit of 60 % of GDP. Member States should be required to their debt reduce to " quickly enough ". These are defined as a reduction of one-twentieth of the difference between the 60 % threshold and the actual debt in the past three years.
With sustained "excessive imbalances " – ie, the repeated infringement of the deficit rules or chronic surpluses – also an annual penalty must of 0.1% of GDP be paid. The Commission wanted to but in advance proposals for the prevention and correction issue of macroeconomic imbalances . To this end , various economic indicators to be assessed regularly . Member States must provide appropriate an action plan to correct the imbalances.
The EU Commission also issued from a new directive the requirements of the budgetary framework of the Member States. The minimum requirements are for all the elements that make for the fiscal control at the national level, the basis , such as accounting systems , statistics, forecasting methods and budgetary provisions . Reason for the regulation to be the decentralized nature of fiscal policy.
-By Katrin Haertel , Dow Jones Newswires , +49 ( 0) 69 29725 300
konjunktur.de @ dowjones.com
DJG / kth / apo / sh