European Union close to impose fines on countries with excessive deficits
Best Growth Stock – The countries of the EU and the European Parliament are close to reaching an agreement on the controversial imposition of fines on member states with excessive deficits and uncompetitive, as indicated by various community sources today.
After nearly a year of negotiations, both sides have approached positions and could reach a final agreement next Monday in Strasbourg (France), where the meeting is held monthly plenary of the Parliament, although the House has no plans to officially rule until the end of the month.
The measure was proposed in September 2010 by the European Commission within a set of six measures to strengthen economic governance in the EU.
This proposal would fine in a preventive manner to countries that deviate from the deficit limit of 3% of GDP set by the Stability and Growth Pact, even before they have exceeded that threshold.
Liberal group of MEPs from Parliament this week that claimed there had been significant progress in negotiations that could allow to reach an agreement soon.
“It’s a positive step that Member States now accept automatic sanctions in the preventive arm of the Stability and Growth Pact and not just in the right arm,” said the leader of the Liberals and Democrats, Guy Verhofstad, who admitted, however, that there are still details to be specified.
Several diplomatic sources today noted some progress in the negotiations.
From the European Commission, strongly reaffirms the need to reach as soon as possible an agreement on the package of economic governance to strengthen market confidence in the European economy.
The scheme of sanctions proposed by the EC implies that countries that do not respect the objective of budget balance over the medium term will create a reservoir, generating interest, amounting to 0.2% of GDP.
The deposit, plus interest, will be returned if the country takes steps to clean up their finances, but if it does, exceeding the deficit limit, the EU will open a formal procedure and the deposit shall cease to interest recoverable .
Once this first stage of a preventive nature, not to exceed six months, move to a corrective phase and the imposition of sanctions itself.
According to the formula proposed by the EC sanctions, both phases would be “semi”, ie, immediately adopted unless a majority of two thirds of the Member States (qualified majority versa) object within a specified period.
This possibility, supported by the European Central Bank, the European Parliament and countries like Germany are in favor of tightening the system, generated a strong rejection of other European partners, who claim to impose his veto by a simple majority or qualified ordinary, reluctant to give much Executive power to the EU.
Category: Business News
