Europe

Europe

Germany proposes new EU economy watchdog

10 August 2011 02:03 (UTC +04:00)

Baku-APA. German Economy Minister Philipp Roesler on Tuesday proposed a new EU institution to better supervise member states’ fiscal status and policies, APA reports referring Xinhua.

The new establishment, called by Roesler as the "stability council",would be an independent body capable of imposing sanctions on countries that violate certain disciplines on debt and budget management, Roesler told reporters.

The council would also have the power to monitor member states’ actions on implementing financial reforms, like cutting deficits and making best use of financial aid, he added.

"We need this new culture of stability under the context of the European Union," said the minister, also head of German pro-business party Free Democrats.

Roesler also urged so-called "competitiveness tests" among eurozone countries, which might include evaluations on economic vigorousness, innovation environment and labor market situation.

"If you fail them, there should be consequences," he said.

Besides such thorough examinations, the minister called on all 17 eurozone countries to quicken the constitutional amendments to build a debt limit, with a view to avoiding another Greek-style sovereign debt crisis and strengthening the stability of eurozone economy.

Roesler said Germany would propose these ideas in the next meeting of EU economic and finance ministers.

Germany has long criticized eurozone’s weaknesses in peer surveillance and the implementation of the Stability and Growth Pact, which demands all members keep their deficits below 3 percent of economic output and public debts below 60 percent.

However, many eurozone countries, such as Greece, Portugal, Spain and Italy, have severely breached the rules set in the pact with no harsh sanctions.

German Chancellor Angela Merkel said earlier that such rules should be toughened significantly and those who disrespect them should face punishment, including withdrawing their voting rights.