MEPs back fines for non-compliant EU countries
Wednesday April 20 2011 | 06:30 AM

The European Parliament's economics committee has thrown cautious support behind a stronger set of laws revamping economic governance of EU member states.

In a meeting of the economic and monetary committee yesterday, sterner rules, including the earlier enacting of punishments when nations run budget deficits along with measures to aid transparency, were proposed.

Seeking to toughen up measures agreed at a finance ministers meeting last month, the proposals would see nations having to make a deposit of 0.1 per cent of GDP as soon as the European Council decided they had failed to take corrective measures.

Finance ministers had proposed that any fine would be enacted only if a nation disregarded two of these warnings.

This figure could also be increased to 0.3 per cent of GDP if nations showed "deliberate and severe non-compliance with recommendations" correcting macroeconomic imbalances, the package proposes.

A new one-off fine of 0.5 per cent of GDP would also be imposed for countries caught fudging their accounts.

The measures see the Parliament demanding the introduction of "economic dialogues" in which Governments, the eurogroup president and the commission would explain their policies to MEPs.

It also envisages a greater role for the European Commission in jointly examining and judging member states' efforts at complying with warnings and correcting fiscal imbalances, run in conjunction with the Council.

A statement from the Parliament argued that it would see "member states' room for bargaining their way out of trouble" being "further reduced" because of the increased governance.

"Equal policing by Council and Commission should make it more difficult for Member States to decide to ignore each others' problems, and also help to achieve the balance sought between toughness and smartness," it reads.