MEPs to back tougher rules on economic regulation

Parliament to vote on ‘six-pack’ legislation but split over sanctions for countries that break rules.

MEPs are next week expected to reach a cross-party agreement on six pieces of legislation aimed at preventing another financial crisis.

The new laws will result in changes to the way the EU monitors fiscal policy, deals with microeconomic imbalances, and punishes member states that breach toughened-up rules.

Member states have already agreed their approach to the planned legislation, dubbed the “six-pack” by Olli Rehn, the European commissioner for economic and monetary affairs. But many MEPs believe that the member states’ position does not impose enough constraints.

This is a significant moment for the European Parliament, which is for the first time using its powers under the Lisbon treaty that give it an equal say with member states on macroeconomic issues.

Six MEPS from across the political spectrum have drafted reports on the proposals, and between them have made 300 amendments to the European Commission’s initial text. A further 1,700 amendments have been put forward by other MEPs since the start of the year.

Views among the six MEPs differ on the final text to be agreed by the Parliament’s economic and monetary affairs committee, but they are “much closer than we were expecting”, according to Elisa Ferreira, a Portuguese Socialist MEP who is in charge of the report on dealing with macroeconomic imbalances.

“The Lisbon treaty gave extra powers to the European Parliament and the European Parliament is going to use them,” she said. “It needs to use them more than ever.”

Ferreira said she hoped that the final text would say more about wage-level protection and about encouraging growth through spending.

The political groups also hold diverse opinions about the sanctions for member states that breach stability and growth pact rules, and about the rate at which excessive debt should be reduced per year.

Hungarian hopes

The vote will take place on 19 April. EU finance ministers agreed their position on the six proposals on 15 March. Hungary, which holds the rotating presidency of the Council of Ministers, wants political agreement between the Council and the Parliament by the summer.

Corien Wortmann-Kool, a centre-right Dutch MEP who is leading the Parliament’s work on prudent fiscal policy, has called for a “rules-based approach” to prevent member states making decisions among themselves.

“We have to learn from the current crisis,” she said. “There needs to be a clear surveillance process [of macroeconomic imbalances] with clear sanctions that a country cannot get out of. Small member states and large ones need to be treated equally.”

She favours a ‘reverse majority’ mechanism, under which sanctions on member states would be considered approved – unless member states decide otherwise by a qualified majority.

“We cannot spend money we do not have. That is a rule that has been forgotten and that is why we have ended up in this mess,” she said.

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