Brussels is consolidating power as EU member states are prodded toward economic union.FT correspondents Alex Barker and Peter Spiegel say they have seen a draft of a new proposal to enter into “binding contracts” with the EU aimed toward implementation of detailed austerity plans:
Eurozone countries would have to sign binding contracts with Brussels, committing them to detailed fiscal reform, according to a draft EU agenda that would increase the bloc’s control over national economic policies.
The provision, included in a report distributed to EU countries before this month’s summit, would require all 17 eurozone members to sign on to the kinds of Brussels-approved policy programmes and timelines now negotiated only with bailout countries.
This follows a report in the WSJ last week that talks on designing a “centralized budget” had begun among EU members.
The new plan would, in essence, give creditor countries like Germany more control over the economic policies of debtor countries in the struggling euro periphery.
However, the Maastricht Treaty itself (the founding document of the EU) already includes a provision that member states keep their budget deficits to 3 per cent of GDP at the most. That clearly has not been upheld.
It is unclear how this new plan would be different in implementation.