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LibDems in warning over Euro budget deficit powers

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Any move to give the European Commission powers to take member states to court over budget deficits would be illegal, claim the Liberal Democrats.

A leaked draft of the pact being drawn up to help deal with the sovereign debt crisis proposes extending the commission’s existing power to take member states to the European Court of Justice to include when countries fail to meet strict fiscal rules set out in the agreement.

But LibDem MEP and European constitutional affairs spokesman Andrew Duff says this would require a change in the Lisbon Treaty and the consent of all 27 member states.

He says: “It is a substantive increase in the powers of the commission which should not be attempted in an intergovernmental treaty. It is proving very controversial, it is not legal and I think you will see it substantively changed.”

The draft also proposes starting a process within five years aimed at incorporating the agreement into EU law. Analysts say if that happens, the rules, which include limits on the size of deficits, would apply to the UK but the UK would be able to veto the move.

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