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Treasury chief Timothy Geithner attended the meeting, seen as an indication of growing US concerns over the debt crisis. (Czarek Sokolowski/Associated Press) |
EU tightens rules on overspending
Stalls on Greece bailout payment
WROCLAW, Poland - The European Union’s 27 countries overcame a year of infighting to agree yesterday to tougher budget rules that make it easier to punish overspending governments, but failed to produce any new measures that might contain the debt market turmoil threatening it.
Jacek Rostowski, the Polish finance minister, said his EU counterparts approved the measures at their meeting in Wroclaw, Poland, where the officials were under international pressure to show progress in their fight to contain the debt crisis.
Although the rules will not ease immediate market concerns, they are a first indication that Europe’s states are willing to give up some sovereign powers to bolster longer-term confidence in the region.
The delay and the complicated voting procedures that define the final deal, however, suggest more progress will be hard to come by.
“I don’t say that it is perfect,’’ said European Central Bank president Jean-Claude Trichet. “But it is a very significant improvement.’’
It will now be easier to put sanctions on governments that breach EU limits on debts and deficits, because in most cases a state would have to rally a majority of governments to stop the punishment. That is a reversal of powers, since until now, a majority was necessary to impose sanctions. Governments that ignore warnings can also be punished.
Eurozone officials said they would not decide until October whether Greece had met conditions to receive the next installment from its original $151 billion bailout, required to keep it from a default.
© Copyright 2011 Globe Newspaper Company.
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