Ministers to discuss fines for member states that break rules

MEPs seek to take a tougher line than suggested by Commission.

EU finance ministers will discuss measures to police the management of public finances on 15 February, as MEPs signal that they want the EU to take a tougher line on countries that break rules.

Ministers will for the first time examine the package of six economic governance proposals, which include the possibility of fines for eurozone countries with excessively high debt or deficit levels or with irresponsible economic policies.

The European Parliament is also beginning its review on the proposals, with MEPs warning that their voice must not be ignored by EU leaders. The Parliament has full co-decision powers on the legislative proposals, but some MEPs fear that their contribution is already being sidelined by high-profile initiatives coming from national capitals.

The proposals under discussion emerged from the European Commission on 29 September, and finance ministers’ discussions will also take account of the conclusions published on 21 October by the taskforce chaired by Herman Van Rompuy, the president of the European Council.

Carl Haglund, a Finnish Liberal MEP who is leading the Parliament’s work relating to sanctions, is seeking tougher punishments than those proposed by the Commission and the taskforce.

He said: “Sanctions are very necessary for the credibility of the whole package. It is important to push countries to take necessary steps. If a country doesn’t want to comply and take corrective action, it needs sanctions.”

So where the Commission envisages fines identical for all countries, and equal to 0.1% of a country’s gross domestic product (GDP), Haglund’s report argues for a flexible fine rate between 0.1% and 0.5% of GDP, to deal with “more severe and less severe problems”.

Severe offences would include a country manipulating financial data, falsifying statistics or providing misleading information, he said.

But he does not believe that fines are appropriate simply when a country has an excessive macroeconomic imbalance; instead, they should be imposed when a country fails to comply with recommendations or to provide adequate corrective plans.

Marginalising Parliament

Sylvie Goulard, a French Liberal MEP who is leading on the budgetary surveillance report, reflected the concerns over marginalisation of the Parliament. “This is going to be a big battle with the Council,” she said. “We hear that countries like France and Germany are coming up with more and more initiatives, but how is this package going to be adopted if it just becomes a small part of a bigger deal that we [the Parliament] are not involved in?”

Goulard spoke in favour of the Commission’s ‘reverse majority’ proposal, under which sanctions should be considered approved unless member states decide otherwise by a qualified majority. Member states look set to adopt a position that would slow that process down.

Jean-Claude Trichet, the president of the European Central Bank, who is critical of member states’ proposals to weaken the mechanisms for imposing sanctions, is due to appear before the Parliament’s economic committee on Monday (7 February).

MEPs are due to vote on the six draft texts in April, before opening negotiations with member states. Hungary, which holds the rotating presidency of the Council of Ministers, wants to reach political agreement by the summer.

MEPs have signalled their intention to push for a wider application of a new directive on consumer rights than favoured by member states.

However, business groups are concerned that the position could harm small and medium-sized companies. They want member states to hold firm on limiting the new directive to online sales only.

The European Parliament’s internal market committee voted on 1 February in favour, by a small majority, of a mixed approach of minimum and maximum harmonisation of laws governing sales online and in shops.

This would ensure full harmonisation in areas such as delivery deadlines and a right of withdrawal for distance sales and off-premises sales, but would leave national governments the right to retain higher standards in other areas, notably in relation to remedies when goods are not as described in the contract.

Difference of opinion

The Parliament’s position does not go as far as the initial European Commission proposal, which recommended full harmonisation in all areas of consumer rights.

Green and Socialist MEPs voted against the package of amendments because they said the directive could lower the level of consumer rights in some areas.

Beuc, the European consumers’ organisation, said the Parliament’s stance was a move in the right direction, but that it would lead to a decrease in consumer protection for doorstep sales.

UEAPME, the employers’ organisation representing small and medium-sized enterprises, criticised the Parliament’s position.

Luc Hendrickx, its enterprise policy director, said: “MEPs should have concentrated on where Europe is able to provide added value, rather than pretending to regulate every single aspect, including those on which full harmonisation of national legislation is simply impossible.”