Britain rejects deal for EU to vet national budgets

8th June 2010, Comments 0 comments

Britain rejected point blank on Tuesday EU claims it would let Brussels vet its budgets ahead of domestic lawmakers amid a growing row over moves towards an "economic government" for Europe.

"The budget will be presented to parliament first," British Treasury minister Mark Hoban said.

"There is no question of anyone other than MPs seeing it first. Once the chancellor has presented it to parliament, it is of course publicly available," he said.

Hoban was forced to respond after EU president Herman Van Rompuy and a French diplomat presented the vetting scheme as a fait accompli.

Van Rompuy said EU finance ministers, meeting in a "task force" he is chairing on the issue, had agreed to share information on budget concepts in advance, giving "time to adjust before the budget is approved."

The French official attempted to bridge the gap, saying London would reveal its plans "not after, (but) before or simultaneously" to presenting them to MPs in Westminster.

Brussels wants to be able to oversee national spending priorities so as to better bring member state finances into line with EU rules on public deficits and debt.

But Britain does not want any of the Van Rompuy recommendations to apply to countries, like itself, that do not use the euro currency.

Another diplomatic source said London refuses under any circumstances to provide the European Commission, the EU's formal budgetary watchdog, with even loose concepts of the budget in advance of parliament.

The EU's economic affairs supremo Olli Rehn insisted that his oversight plan, which he has described as the key lesson from the current Greek debt crisis, would not breach "sovereign and fiscal powers."

He said Brussels only wants to see the big picture "before countries take final decisions" and stressed that his aim is not to go over budgets "line by line.

"We have neither the intention nor the resources to do that," he added. "Its only a matter of EU member states respecting rules they themselves decided."

The commission has predicted that Britain will have the worst public deficit in the EU next year.

Britain's Conservative finance minister George Osborne last month told EU counterparts, during their first meeting since he took office, that London would not change its stance on budgets.

Previous Labour prime minister Gordon Brown also clashed with EU leaders over the use of the phrase "economic government," a term deployed by French President Nicolas Sarkozy, when the official English translation of Van Rompuy's brief referred to the less controversial "economic governance."

Under moves towards closer surveillance, EU ministers did agree to design new cross-border sanctions that will allow an intervention before member countries get up to their necks in debt.

Starting with Greece, its fellow governments have had to provide a safety net for struggling eurozone nations to the tune of nearly 600 billion euros set aside for the next three years.

Britain, through its EU budget payments, is a contributor to that package.

Leaders want to pressure governments to maintain a deficit ceiling of three percent of Gross Domestic Product and a debt cap of 60 percent of output -- limits breached by nearly all EU countries.

Proposals to sanction those overstepping the mark range from a suspension of voting rights, a freeze of Brussels' funding or ordering capitals to run budget surpluses.

Van Rompuy said that non-financial sanctions "would require treaty change," to which a host of members, led by Britain, are resolutely opposed.

German daily Handelsblatt reported on Tuesday that planned talks between German Chancellor Angela Merkel and Sarkozy the previous night were postponed amid tensions on the issue.

EU leaders are to debate governance questions at a full summit next week in Brussels.

© 2010 AFP

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