EU gets tough on finance oversight
By Aoife White |
June 9, 2010, Wednesday
|
Print Edition
Print Edition
THE European Union yesterday thrashed out ways to toughen oversight of how governments run their economies in a bid to regain credibility with markets and prevent a repeat of the debt crisis afflicting the region.
Olli Rehn, the EU's Economy Commissioner, said he expects finance ministers from the 27-nation bloc would move quickly to reinforce economic governance at a meeting in Luxembourg, a day after most agreed on more sanctions for countries with risky finances.
The euro has been roiled by the fallout from a debt crisis that started in Greece, one of the 16-nation currency's smallest economies, after it revealed that it had been lying over the state of its public finances.
The crisis has exposed weaknesses in the monetary union and led to massive market pressure on governments to show they can reduce spending, even as the economic recovery remains fragile. The austerity measures are provoking unrest and labor protests across the continent, with Spanish civil servants on strike yesterday.
Rescue package
The euro has lost nearly 22 percent of its value against the dollar in the past six months.
Yet even as the EU agreed the details of a massive 750 billion euro (US$897 billion) financial rescue package to stave off bankruptcies, a new potential euro member stepped forward.
Estonia is set to become the currency union's 17th member in 2011, Luxembourg Prime Minister Jean-Claude Juncker, who chairs eurozone finance minister meetings, said on Monday. Estonia will get the final word when EU finance ministers meet on July 13.
French Finance Minister Christine Lagarde said she "will welcome Estonia with a lot of satisfaction in the euro club" even as it faces a rapid overhaul of its basic rules.
"We have to go quickly to a deepening and reinforcement of the rules of governance. Economic governance means rules of functioning, budgetary responsibility, solidarity principles; on all these subjects we have to go fast," she said.
Finance ministers yesterday agreed to give the EU's statistics agency Eurostat the power to audit national public finances in heavily indebted countries - that aims at preventing countries from misreporting or falsifying statistics, as Greece did.
EU leaders will next week lay out broad goals to make their economies function better. They are also likely to accept more warnings and greater oversight of their economies.
However, Britain is adamant that it won't be sending its budget to the EU executive before it's published.
Olli Rehn, the EU's Economy Commissioner, said he expects finance ministers from the 27-nation bloc would move quickly to reinforce economic governance at a meeting in Luxembourg, a day after most agreed on more sanctions for countries with risky finances.
The euro has been roiled by the fallout from a debt crisis that started in Greece, one of the 16-nation currency's smallest economies, after it revealed that it had been lying over the state of its public finances.
The crisis has exposed weaknesses in the monetary union and led to massive market pressure on governments to show they can reduce spending, even as the economic recovery remains fragile. The austerity measures are provoking unrest and labor protests across the continent, with Spanish civil servants on strike yesterday.
Rescue package
The euro has lost nearly 22 percent of its value against the dollar in the past six months.
Yet even as the EU agreed the details of a massive 750 billion euro (US$897 billion) financial rescue package to stave off bankruptcies, a new potential euro member stepped forward.
Estonia is set to become the currency union's 17th member in 2011, Luxembourg Prime Minister Jean-Claude Juncker, who chairs eurozone finance minister meetings, said on Monday. Estonia will get the final word when EU finance ministers meet on July 13.
French Finance Minister Christine Lagarde said she "will welcome Estonia with a lot of satisfaction in the euro club" even as it faces a rapid overhaul of its basic rules.
"We have to go quickly to a deepening and reinforcement of the rules of governance. Economic governance means rules of functioning, budgetary responsibility, solidarity principles; on all these subjects we have to go fast," she said.
Finance ministers yesterday agreed to give the EU's statistics agency Eurostat the power to audit national public finances in heavily indebted countries - that aims at preventing countries from misreporting or falsifying statistics, as Greece did.
EU leaders will next week lay out broad goals to make their economies function better. They are also likely to accept more warnings and greater oversight of their economies.
However, Britain is adamant that it won't be sending its budget to the EU executive before it's published.
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