Germany says to present EU deficit rule proposals Friday

17th May 2010, Comments 0 comments

Germany will lay out wide-ranging proposals to bolster Europe's fiscal rules on Friday, a spokesman said, declining to comment on reports Berlin would push for an EU equivalent of its own debt-limiting law.

"We think that the (EU) Stability and Growth Pact has not been sufficient to prevent bad budgetary trends, not only in Greece but in other eurozone countries," Michael Offer, a finance ministry spokesman, told a regular briefing on Monday.

Offer said Finance Minister Wolfgang Schaeuble was preparing for a meeting hosted by EU president Herman Van Rompuy Friday "to discuss there with other euro area countries measures to ensure that the eurozone as a whole is strengthened."

Berlin would propose measures in three areas --"better prevention of budgetary crises ... improved political co-ordination and surveillance (and) ... a firm framework for combatting crises in the eurozone."

Despite being pressed several times to comment on reports that Berlin would seek to impose a European version of its own "debt brake", which enshrines in the constitution a limit on running overly high deficits, Offer was tight-lipped.

"Individual proposals from the German side are currently being worked out in the finance ministry and I can not pre-empt them here," Offer said.

The Financial Times reported Monday that Berlin would lobby in Brussels for an EU form of its "Schuldenbremse" or "debt brake" that prevents the federal government from running a deficit more than 0.35 percent of output.

EU rules require member states to run budget deficits of not more than three percent of Gross Domestic Product but many have breached that level significantly, with Greece's annual shortfall put at nearly 14 percent.

© 2010 AFP

0 Comments To This Article