German Proposal for European “Budget Police”

Germany propose to establish another EU institution whose main task will be to  crack down and impose sanctions on countries that do not live up to the Unions new rigid budget discipline and pro-business labour policies. According to the, will the new body also be authorized to carry out “competitiveness tests” amongst euro zone states to see if labour market policies are competitive enough.

“If you fail them, there should be consequences.”

Philipp Roesler

Germany’s economy minister, Philipp Roesler, told reporters yesterday that the bloc should create a new EU institution, a “stability council,” of unelected supervisors that would ensure that member states stick to budget temperance, limit debt and keep in check debt growth.

This council should be given the power to impose sanctions on countries to ensure that they cut their deficits, in addition to monitor the use of financial assistance.

The plans would also require that a German-style “debt brake” be written into national constitutions, the reports.

But the new body would also be empowered to carry out “competitiveness tests” amongst euro zone states to see if labour market policies are sufficiently competitive. The tests would also assess the innovation climate.

“If you fail them, there should be consequences,” he said, Roesler said, speaking to reporters in Berlin, Tuesday.

The stability council would be independent of voters so as to avoid “political pressure” and could be able to impose sanctions automatically and instantly.

Roesler says Germany will bring the proposal to the next meeting of the EU finance ministers.

“However, it appears that the minister, head of the free-market-liberal Free Democrats, has not cleared the ideas with his Christian Democrat coalition partners,” the writes.

“This is an opinion of the ministry and not a government position,” a government officials is telling the Financial Times Deutschland.

The Free Democrats are struggling in the polls and the radical proposals could be read as an attempt to shore up the party’s base.

Ordnung muss sein!!

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Filed under International Econnomic Politics, National Economic Politics

4 responses to “German Proposal for European “Budget Police”

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