EU sharpens budget discipline

BRUSSELS – European Union governments should lose access to EU funds and place deposits with the European Commission if they break the bloc’s budget rules capping deficits and debt, the Commission said yesterday.

The proposals by the EU executive are part of the bloc’s efforts to sharpen budget discipline rules to prevent another sovereign debt crisis like the one triggered by years of overspending by Greece and its faulty statistics.’For the euro area member states, an interest-bearing deposit could be temporarily imposed to countries making insufficient progress with budgetary consolidation,’ the Commission said in a statement.’Member states should be subjected to provisions of the existing excessive deficit procedure if the pace of debt reduction is not satisfactory,’ it said.The proposal will now be studied by EU finance ministers, who are drafting an overhaul of the bloc’s economic rules to prevent a repeat of the debt crisis. – Nampa-Reuters