Ministers set to approve new EU economic rules
Moves to ease the economic pressure on Europe’s governments are due to be approved by EU leaders at a summit in Brussels tomorrow.
The breakthrough follows agreement between EU finance ministers last night on more flexible rules for running the single currency.
The so-called Stability and Growth Pact sets deficit, debt and public spending limits, with hefty penalties for Treasuries breaching the restrictions.
It was Germany’s idea to impose controls on potentially unstable EU economies which could de-rail the single currency.
But as soon as Germany itself fell foul of the rules, Chancellor Gerhard Schroeder decided the system was too tough.
Both Germany and France have breached the rules for three years running, but the hefty fines the Commission wanted to impose were voted down by EU finance ministers.
The new deal means governments will in future be allowed to breach the rules - but only for a short time and only if they prove the reason is linked to the costs of ensuring European unity.
