EU told to punish deficit offendersA
FRANCE
and Germany yesterday urged the European Union to impose tougher sanctions on serial budget deficit offenders, including stripping them of their voting rights in the Eurozone.
The Franco-German proposal, made in a joint letter and approved by a French cabinet meeting attended by German finance minister Wolfgang Schaeuble, forms part of European efforts to repair damage from the Greek debt crisis, which also include the bank stress tests.
“We are sure that these bank tests and measures such as deficit cutting and tougher rules for the Stability and Growth Pact will allow us to restore confidence… in the stability of Europe and the stability of the euro,” Schaeuble said.
The document called for tougher penalties, including a temporary suspension of the Eurozone voting rights of a country in persistent breach of the EU’s budget deficit limits, although it acknowledged that this may require a change in the EU treaty.
It also suggested strengthening peer surveillance to ensure better budget coordination, and broader monitoring of gaps in competitiveness, structural reforms and private debt.