New era as Brussels tightens its grip on budget miscreants
By Robin Emmott
BRUSSELS (Reuters) - Four months ago, President Francois Hollande warned Brussels not to tell France how to run its finances. In a few weeks' time, the European Commission will do exactly that as a new era of rigid fiscal surveillance begins in Europe.
In one of the most far-reaching responses to the region's debt crisis, the Commission, the EU's executive, will now run the rule over the budget plans of the 17 euro zone countries before they are fully digested by national parliaments.
The aim is to raise a red flag before it is too late and prevent a repeat of the turmoil of the past four years, which began because countries were living far beyond their means.
The Commission, which acts as a civil service for the EU, will have the right to send back any budget plans it thinks do not make the grade. Countries can ignore its advice, but face tough, rapidly imposed fines if they stray out of line.
The rules underscore just how far power over budget policy has shifted from capitals to Brussels and marks a fundamental change in the way the currency area is run, with a sizeable amount of sovereignty being surrendered - perhaps more than many governments realized at the time.
If it works, it may launch the euro zone towards a single finance ministry handling taxation and bond issuance - a once unthinkable scenario that the crisis pushed leaders to consider.
"In the euro zone, whatever one country does affects everyone else," said Pablo Zalba, a Spanish lawmaker in the European Parliament, which this year approved the Commission's monitoring powers, known in EU jargon as the Two-Pack.
"We cannot make the same mistakes again," said Zalba. Continued...