An attempt by the European Commission to influence the budgetary policies of countries in the single currency ran into strong opposition yesterday.
Germany and Ireland registered their protests after Pedro Solbes, the European commissioner for economic and monetary affairs, raised the prospect that Brussels should vet the budgets of nations in the eurozone before they were presented to national parliaments.
The strong opposition, which came at a meeting of the finance ministers of the 12 countries in the euro, is expected to block the proposal. Although the 12 have agreed to co-ordinate their economic policies, critics of the plan believe pre-empting the views of national MPs would mark a significant extension of the Commission's influence.
The proposal could also put up another barrier to British membership of the single currency. Under the 1993 European Communities Act, the British Government must submit its pre-Budget report to Parliament before sending it to Brussels to see whether its strategy meets the EU's fiscal rules.
Yesterday, Gordon Brown, the Chancellor, lodged an objection to the latest criticism of his economic strategy by the Commission, which has called for Britain to be "close to balance or in surplus" by the 2003-04 financial year. The Treasury is forecasting a deficit of 1.1 per cent of gross domestic product as a result of Mr Brown's decision to pump £40bn into the National Health Service over five years, and meeting the Brussels target would mean spending cuts or tax rises of £11bn.
Mr Brown told a meeting of finance ministers from all 15 EU nations he was confident his plans were consistent with a "prudent interpretation" of the EU's stability and growth pact.Reuse content