Ministers seek new budget powers



Radical new plans which could open the way for a common European fiscal policy will be discussed today by European finance ministers as part of a new drive to create a single currency.

The plans, which would effectively subject national budget planning to greater joint EU decision-making, are certain to fuel British fears that the single currency would undermine sovereignty. The aim is to make EU countries inside and outside monetary union keep their spending under control, so that the single currency remains stable and keeps its value.

Yves Thibault de Silguy, the EU commissioner for monetary affairs, said the intention of the programme is to make countries meet the economic convergence rules set out in the Maastricht treaty. He spoke as finance ministers gathered for an informal meeting in Verona.

Mr de Silguy outlined a system under which finance ministers might in future have to submit their taxing and public spending plans to their European partners for agreement, should their economies appear to be running into trouble. If the plans were not deemed to be tough enough to keep the national budget in line, the EU council might propose alternatives. In effect, he said the council would become a "council of stability".

"It would be up to the council to evaluate progress," said the commissioner. Mr de Silguy spoke of the need for "peer group pressure" to keep countries on the right track.

One set of stricter new rules would be drawn up for countries seeking to meet the Maastricht rules in order to qualify for monetary union, and another set would be drawn up for those countries already inside EMU.

Rules for economic convergence already exist under the treaty, which also includes provision for sanctions. But Mr de Silguy suggested yesterday that support was now growing for a far tighter programme of "automatic" rules and penalties to encourage all countries to keep to the rules, particularly on budget deficits.

Mr de Silguy spoke of a new "stability programme". The programme, he said, would involve "auto-correctional" budgetary measures. He also floated the idea of a new "multi-lateral surveillance system" for EU economies which might be operated by the European Commission.

Kenneth Clarke, the Chancellor, was already expecting to do battle in Verona over EU moves to encourage Britain to join a new exchange rate mechanism in the run up to monetary union. As news of the new "stability programme" emerged it seemed certain that Mr Clarke will now have to defend another flank, with national powers over fiscal and monetary matters both under assault.

Signs that the EU might be moving towards developing a common fiscal policy have been slowly emerging in recent months. There has been growing concern about how to bring countries into line in the run up to monetary union. But concern has also focused on how to force countries which do join to continue to obey the convergence rules.

In November Theo Waigel, the German finance minister, proposed a "stability pact", threatening fines for countries which join the single currency if they then failed to maintain the Maastricht criteria. The "stability programme" appears to have grown out of this plan.

The Commission appeared wary yesterday of giving too much detail of the plan, which officials acknowledge would be viewed as highly controversial in Britain and some other member states. "We are not drawing a new scheme to tell Britain what taxes to level," said one Commission official. "We are not setting out an economic blue-print for the rest of time."

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
Arts and Entertainment
Lena Headey as Cersei Lannister
TVSPOILER ALERT: It's all coming together as series returns to form
footballShirt then goes on sale on Gumtree
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine