Slovak News Back to the news
Analysts: Brussels to Get Hands On with Spendthrift Eurozone Budgets
Monday 22 March 2010 Zoom in | Print page
Bratislava, March 22 (TASR) – According to political analyst Radovan Geist, it's the existing disproportion between the centralised monetary policy of the Eurozone and the decentralisation of fiscal policies that has prompted discussion in Brussels as to how rein in Eurozone member countries that are racking up deficits.
"There's no specific legislative proposal in place at the moment, it's just Brussels probing," suggests Geist. "Based on what response there will be from the member states, time will tell how, and if at all, the European Union will interfere in budget creation in individual countries."
The Union has already been dabbled in this, by the stipulations included in the Stability and Growth Pact – the criteria used prior to the derision in mid-2008 on euro adoption in Slovakia on January 1, 2010. "Slovakia reports its expenditure and income plans three years ahead, by which the Commission is already now sufficiently informed to consider risks and sustainability when it comes to public finances," TASR was told by Radovan Durana from the Institute of Economic and Social Analyses (INESS).
Durana assumes that a more detailed reporting within the Pact represents no actual guarantee of an improved management in terms of public finances. However, he said, the question is what tools and mechanisms will be applied in order to force countries to follow the rules set by EU institutions. Durana underlined that the current problems are not a result of the lack of rules - it's the fact that the countries don't comply with these rules.
Also according to the Slovak Finance Ministry's spokesman Miroslav Smal, the EU is about overall coordination of individual member states' economies - rather than about "dictating" the conditions.
The European Commission's plans - to intervene more directly in the Eurozone member states's budgets - has been revealed by EU Commissioner for Economic and Financial Affairs Olli Rehn, in an interview for a German weekly Welt am Sonntag. He expressed his discontent over the current mechanism of Eurozone countries reporting on their budgets only when these have already been created. "It's too late for that," said Rehn.
[The new member countries, by and large, are not the worst offenders in this sphere, with the term PIGS (Portugal, Ireland, Greece and Spain) now in common parlance. - ed. note].
All rights reserved. Any publishing or further dissemination of press releases and photographs from TASR's resources without TASR's prior written approval constitutes a violation of the Copyrights Act.
