The European parliament says democratic accountability, measures to boost growth and a financial transactions tax must be included in the intergovernmental treaty aimed at installing fiscal discipline in the Eurozone.
Once complete, the fiscal pact will place strict budget rules on Eurozone countries and any other EU member states which sign up to it. The European parliament today voted overwhelmingly to back a motion highlighting dangers posed by the pact.
The pact puts the European Commission at the heart of overseeing member state budgets, something MEPs have already suggested might be against EU law. The motion calls for member states’ national parliaments and the European parliament to be involved in all aspects of economic coordination and governance.
It says the pact puts too much emphasis on austerity measures and calls for it to include the introduction of a redemption fund to take over some sovereign debts, bonds to fund infrastructure projects and a financial transaction tax.
David Cameron recently blocked the pact being set up through changes to EU treaties because he could not get assurances on a number of issues including that an FTT would not be applied to the UK as a result.
Leader of the Conservatives in the parliament and MEP for the North East Martin Callanan said: “This agreement will do nothing to solve the immediate problems. It has diverted attention and resources away from truly addressing the crisis. The debts of many Member States are unsustainable and they need substantial reform and subsequently devaluation”.
UKIP MEP Nigel Farage added: “Austerity alone will not work. You are driving countries into depression just to save the euro project.”
The motion adds that the pact risks embedding a two speed Europe. Despite Cameron’s blocking of the first attempt to introduce the changes straight into EU treaties, it backs a call in the pact that the rules should be introduced into EU Treaty law within five years. The vote is not binding but gives an indication as to the mood of the parliament on the issue.
Conservative MP and All-party parliamentary group on European reform chair Andrea Leadsom says: “It is disgraceful that something we vetoed could now be brought in through the back door.”