Lets EUnite!

There has been relatively little coverage of the decision of Ministers for Finance of the EU to scrutinise each other’s budgets before the national parliaments get a chance to do so. This is pretty much, word for word, accepting the proposal of the European Commission that I have written about in my blog here.
It is quite extraordinary for this sort of decision warrant so little attention, especially after the Commission proposal gave rise to so much controversy all over Europe.
The fact that the media didn’t pay much attention to it should not mislead anyone, though. This agreement is commented by some as the first step towards real European unity (read European Governance). Now we will see the politician showing the budget over to their European counterparts who will examine it, not from the point of view of the given nation, but rather asking questions whether the fiscal policy shown in the budget is of benefit of the Union. Thus we can no longer take the budgets as instruments of national fiscal policy but rather just as one piece in the European one.
The implementation of such a revolutionary step is, however, questionable. Yet again the main ‘punishment’ for anyone who would behave economically irresponsible are sanctions. We can only wait and see whether these sanctions will actually be given out. As is well known the sanctions under the Maastricht treaty were never actually used, even though most of the countries did break the criteria under the treaty. One can only be hopeful that the sanctions will be used this time around.
There is hope that this scenario will be the case as countries such as France or Germany both speak of great austerity measures in order to balance their books and it is likely that they will make sure every other country will follow. This can be seen already in the case of Hungary where the new Prime Minister Viktor Orban wanted to spend his way out of recession, doubling the deficit agreed for the year. Straight away he was called to Brussels and changed his rhetoric to one of cuts immediately.
After the agreement from the Minister for Finance Europe is even more closer to unity. The message is we rise and fall together.