European Parliament negotiators reached a deal with the Polish Presidency on the economic governance “six pack.” The deal overcomes the qualms between the Council and the European Parliament about introducing procedures that will allow the Commission to take action when dealing with Member States with unsustainable budgetary and macro-economic policies.
The package also delivers a system enabling certain distinctions to be drawn between “healthy” and “unhealthy” expenditure, which should be able to contribute to competitiveness and economic growth. Finally the package will make a break with the past in that it will considerably improve transparency and accountability in Eurozone decision making.
Over the year long process approaches differed between political groups in the EP and although rapporteurs attempted to bridge the gap, differences remain. Left-of-centre groups fear that the package is too closely focused on fiscal correction, to the detriment of growth and employment. The majority however believes that restoring trust is in any case necessary in order to create growth, through other instruments.
The deal will be taken to the EP’s economics committee and subsequently a vote in plenary is expected for the second session of September.