Britain rejects point blank EU budget peer review 'deal'

8th June 2010, Comments 0 comments

Britain rejected point blank on Tuesday EU claims that it would let Brussels vet its budgets before domestic lawmakers do so, amid growing rows over how to develop cross-border "economic government."

"The budget will be presented to parliament first," Financial Secretary to the Treasury, Mark Hoban, said in a terse statement.

"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 underlined.

Hoban was forced to respond after EU president Herman Van Rompuy and a French diplomat presented the outcome of informal, late-night Monday talks on governance as a fait accompli.

Van Rompuy said ministers agreed during a meeting of a "task force" on the issue to adhere to share budget concepts before they are fixed, giving "time to adjust before the budget is approved."

Brussels wants to be able to re-jig national spending priorities to fit with the broader landscape of competitive imbalances within intertwined EU economies.

But Britain does not want any of the task force's recommendations to apply to countries, like itself, that don't use the euro currency.

When pressed on "specificities" which Van Rompuy referred to in the timing of Britain's budget presentation, a French diplomat said London would reveal its plans "not after, (but) before or simultaneously" to presenting them to Westminster.

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

Britain's Conservative finance minister George Osborne last month insisted he told his EU counterparts, during their first meeting since he took office, that he would not budge on the issue.

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 the brief for Van Rompuy's panel referred to the less controversial "economic governance."

As part of a move towards closer pan-national surveillance, ministers did agree to design new sanctions that will allow partners to intervene before countries get up to their necks in debt.

Concerns over Europe's debt crisis have forced eurozone governments and even Britain, through its net contribution to the EU budget, to bail out struggling eurozone nations.

A 500-billion euros package, the bulk from 16 eurozone members, has been agreed to help struggling EU countries over next three years.

And 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.

Sanction ideas for fiscal laxity range from the suspension of voting rights, the freezing of Brussels' funding or ordering capitals to run up surpluses.

Van Rompuy said ministers spoke about non-financial sanctions, "but everybody is conscious that (these) would require treaty change," to which a host of members, led by Britain, are resolutely opposed.

German daily Handelsblatt said on Tuesday that planned talks between German Chancellor Angela Merkel and Sarkozy were postponed on Monday partly due to tensions over how far and deep to proceed with the governance question.

EU leaders are to debate the issue at a full summit next week in Brussels.

© 2010 AFP

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