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21 June 2011

ECON committee: Finance ministers have not moved enough for good economic governance

The ECON committee said ministers have not done enough to prevent EU countries' budgets from derailing and were backtracking on commitments to look at high-export countries as well as sources of imbalances.

Committee chair, Sharon Bowles (ALDE, UK), said: "It is true that the negotiated text includes a lot of Parliament's ideas, but it does not go far enough, in particular on Reversed Qualified Majority Voting. We will therefore be adopting the majority of the negotiated text but going a little further. However we have agreed to keep the door open to a final vote in July, so the Council can come back with an improved offer".

"It has also been particularly aggravating to the Parliament that France and Germany, the two countries that weakened the stability and growth pact, joined forces to resist the very measure that would do most to prevent such future undermining."

"It is wrong to say that co-decision fails when the Council does not get what it wants. Much has been achieved but on such a political issue, the search for democratic ownership is vital and can only be given by the Parliament."

Corien Wortmann Kool (EPP, NL), the MEP leading the push to make sanctions for countries which fail to address their deficits and debt more automatic, insisted that the Commission must have more clout to keep Member States on the straight and narrow. "We must remember 2003 and 2005", she said, "when governments repeatedly helped each other to evade Commission warnings". She added: "We do not need to look at decision-making processes in three years' time, as suggested by the latest Council proposal. We already know that these processes are inadequate and need improving".

Next steps
On Thursday, Parliament will put the texts which it negotiated with the Hungarian Presidency last week to a plenary vote. An amendment will also be tabled to include automaticity in the preventative part of the stability and growth pact. The vote will however stop short of closing the first reading, in order to allow talks to continue in earnest with a view to clinching a deal as soon as possible. The texts as adopted will provide the European Council with the official position of the whole house.

The main bone of contention is whether to introduce reversed qualified majority voting (RQMV) in Article 6(2) of the text amending regulation 1466/97. This would make it much more difficult for the Council to close its eyes to lax fiscal policy on the part of any given Member State, since the Council would have to vote to reject, rather than simply ignore, the Commission's recommendations for remedial action. This would make it far easier for the Commission to point out that a Member State has not taken the suggested remedial action, the step directly preceding financial sanctions. MEPs argue that without such a clause, it will be very difficult to get to the stage where the imposition of financial sanctions can be used as a threat to bring about corrective action.

Press release

© European Parliament

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