Governments in the European Union are at odds over new reform rules designed to prevent a repeat performance of monetary crisis facing a number of EU member states. Finance Ministers have met to discuss the new rules ahead of a gathering of all EU leaders which will finalize a bunch of reforms planned for later in the month.
Tensions are rising around making the of sanctions for countries breaking the rules ‘semiautomatic’ as well as the want to reduce liabilities on pensions as well as private sector debts to be accounted for when looking at the fiscal health of a nation. The executive arm of the EU, the European Commission proposed that sanction on countries violating the reform rules automatic, unless a majority of EU members blocked them.
Dutch Finance Minister Jan Kees de Jager said of the sanctions, "A lot of the member states are getting cold feet now, but during the sovereign-debt crisis—we saw what it can do.”
Questions over the level of national debt calculated in the rules are also causing division. Poland, for instance, wants to receive credit for pension reforms which reduce national debt:
"The only circumstances under which we can accept semiautomatic sanctions would be in the context of the establishment of a very clear level playing field," said Polish Finance Minister Jan Vincent-Rostowski at the meetings.
Another topic of contention is the creation of a mechanism which resolves future financial crisis from happening. Germany is in opposition to such an idea, but other support it.
Another contentious topic is the creation of a permanent mechanism to resolve future fiscal crises. Germany opposes the idea, EU diplomats say, but a number of other nations support it.
