The tricky use of European recommendations

23rd November 2011, Comments 0 comments

The fact that party presidents have taken a break from negotiations does not mean that the debate on the budget and the impact of Europe on it has vanished. European Commissioner for Economic and Monetary Affairs Olli Rehn made it quite clear yesterday that Belgium, like Cyprus, Hungary, Malta and Poland, must take urgent steps to finalise a budget which complies with the stability pact. This is like music to the ears of the liberals, who are convinced that the budgetary proposals of formateur Elio Di Rupo PS are way below European requirements. European MP Kathleen Van Brempt SP.A however believes the liberals are taking advantage of the contradictory messages from Europe regarding recommendations, more specifically the difference between the stringent budgetary conditions imposed by Europe and the six recommendations which have caused such a dispute during the past few days. With the budgetary deficit above 3% of the GDP, Europe has put Belgium under the 'excessive deficit procedure'. All parties involved in negotiations therefore agree that the budget should not be any higher than 2.8% in 2012. Failure to reach that target will meet with a warning from Europe by 15 December,  followed by a penalty of 700 million euros thirty days later. Then there’s the issue of the six recommendations published by the European Commission in July, which has caused considerable discussion regarding interpretation. The only recommendation that is unanimously agreed on is the resumption that the budgetary deficit should drop to below 3%. The other five recommendations in respect of pensionable age, bank restructuring, wage indexation, the job market and energy sector are more vague and leave ample room for member states to make their own interpretations. “Europe simply suggests that member states should move in a certain direction, but the recommendations are not laws. Member states keep the power in these fields,” says European MP Marianne Thyssen CD&V. If the response from member states to the recommendations is shortcoming, the sixpack can become effective. This sixpack contains measures to tighten budgetary and macro-economic policy. Evaluating the implemented policy of member states could however take months. “A scoreboard for each member state will only be drafted in December,” says Philippe Lamberts, European MP for Ecolo. “If analyses suggest that they threaten to derail, an in-depth analysis will follow and recommendations will then be made for each respective member state. Should they ignore these recommendations, they will receive a warning. Failure to act on it will lead to a penalty.” The entire procedure will require months, but Belgium would be wise to take steps as soon as possible to prevent interventions from Europe, Lambert maintains.

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