November 22, 2011 / 9:26 AM / 8 years ago

EU exec to propose intrusive euro zone budget control-Rehn

BERLIN, Nov 22 (Reuters) - The European Commission will ask on Wednesday for intrusive powers to make sure national euro zone budgets do not break commonly agreed EU budget rules, Economic and Monetary Affairs Commissioner Olli Rehn said.

“Tomorrow, the Commission will present two proposals that bring further stability to fiscal policy of the euro area,” Rehn said in a prepared speech.

“The first proposal underpins national stability culture by requiring numerical fiscal rules on the budget balance, in line with medium-term budgetary objectives of the Stability and Growth Pact,” he said.

The medium term objective in the Stability and Growth Pact — the EU budget rules — is a budget close to balance, or in surplus in structural terms.

The Commission will call for these rules to be inscribed into national law, preferably the constitution.

The Commission will also propose that budget planning be done on the basis of independent forecasts by national fiscal councils.

“But for euro area countries, we need to make sure that the national budgets are in line with the obligations of the Stability and Growth Pact before they are enacted,” Rehn said.

“Thus the Commission should take a look at draft budgets by 15 October at the latest, and if needed issue its opinion,” he said.

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