Van Rompuy task force agrees need for budgetary sanctions

European Council President Herman Van Rompuy and EU finance ministers kicked off negotiations on greater economic co-ordination on Friday (21 May), with participants agreeing the “task force” should concentrate on four main objectives.

While all members stressed the preliminary nature of the talks, agreement was reached on the need for tougher penalties for states that repeatedly break the EU’s budgetary rules, known as the Stability and Growth Pact.

“There was a broad consensus on the principles of having sanctions, financial sanctions and non-financial sanctions,” said Mr Van Rompuy who chaired the meeting.

A European Commission ideas paper presented last week discussed the option of withholding EU funding for budgetary laggards, while a German proposal for Friday’s meeting suggested repeat offenders should have their voting rights in the council of ministers suspended.

Together with the need for a sharpening of budgetary discipline, participants agreed measures should be implemented to reduce divergences in national competitiveness levels, said Mr Van Rompuy.

The body’s final recommendations, due in October, will also look at the establishment of a permanent crisis mechanism to help states struggling with their public finances, together with measures to strengthen “economic governance”, needed “in order to be able to act quicker in a more co-ordinated and more efficient manner”.

“Our final agreement should result in a stronger economic cohesion within the union. This is vital for 27 countries with a common internal market and for a zone of 16 countries sharing a single currency,” Mr Van Rompuy told journalists after the meeting.