HANDELSBLATT EXCLUSIVE

Berlin Slams European Commission over Fiscal Pact Leniency

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Germany is not amused. Picture source: Reuters

The German government has accused the European Commission of failing to hold member states accountable for violating the E.U. fiscal compact and thereby weakening the bloc’s budget rules, according to an internal government report obtained by Handelsblatt.

“The commission doesn’t have the will to go into direct conflict with the individual member states and therefore doesn’t prioritize the implementation of joint agreements,” the seven-page report said.

The fiscal compact, which has been signed by 25 E.U. member states, requires signatories to implement a debt break that limits budget deficits to 3 percent of gross domestic product.

 

Berlin believes that Belgium, Greece, Luxembourg and Spain have not fulfilled their obligations under the fiscal compact. The E.U. Commission, however, has said these countries are in compliance with the compact so long as they pass additional laws.

Brussels’ position has angered Germany, which says in the report that these four countries “have to this day not met their obligations to create sufficient legal foundations” to comply with the fiscal compact.

In the report, the German government said the E.U. Commission has “not fulfilled its oversight role in a satisfactory fashion” and expressed skepticism about giving the executive body additional competencies, particularly when it comes to reforming the euro zone.

Read more on Friday.

 

 

Jan Hildebrand leads Handelsblatt’s financial policy coverage from Berlin and has won several journalism prizes in Germany for his reporting. To contact the author: hildebrand@handelsblatt.com

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