EU finance ministers tackle stability pact reform
European Union finance ministers face tough talks this week on reforming the bloc's fiscal rules in preparation for an E.U. summit scheduled for March 22-23.
Jean-Claude Juncker, Luxembourg's premier and current chairman of the 12-nation eurogroup, is set to table a series of proposals for revamping the eurozone stability pact to the bloc's governments ahead of the finance ministers meeting on March 8-9.
Luxembourg is hoping to "get as close as possible to an agreement" on the reform package at next week's talks, diplomats said over the weekend.
But they insisted that work on the reform proposals was still underway, adding that ministers may have to meet once again before the summit if agreement proves elusive next week.
E.U. leaders are expected to approve reform of the stability pact when they meet in Brussels later this month.
Juncker, however, wants to get most of the tough issues approved and endorsed by ministers before submitting them to leaders.
All E.U. states agree that the pact's implementation must be rendered more flexible. But disagreements persist on just how this should be done.
The focus is especially on softening application of the controversial stability pact rule that governments must keep their budgets below 3 percent of gross domestic product (GDP).
Germany, France and several other states have already breached the 3 percent ceiling for several years in a row.
However, E.U. finance chiefs have repeated over-ruled European Commission recommendations that penalties foreseen under the pact's excessive deficit procedure should be enforced against these countries.
Several E.U. states are demanding that their research and development expenditure and defense spending should not be taken into account when calculating budget deficits.
"Implementation of the pact must not become an obstacle to achieving the E.U.'s growth and jobs agenda," said a diplomat.
Difficult horse-trading among ministers is expected, however, on just when and how such flexibility provisions should be implemented. -- DPA