Central bank calls for EU budget power
THE EUROPEAN Central Bank (ECB) urged European governments yesterday to give the bloc’s institutions the power to force Eurozone member states to take the necessary action to rein in deficits.
The future of the 17-nation currency bloc is in question as some countries, after years of overspending, struggle to get their budgets under control and political institutions lack the power to enforce fiscal rules.
“This could be tackled by giving European institutions the competence to effectively compel Eurozone member states – in a graduated manner as the situation deteriorates – to take the necessary fiscal policy decisions,” the ECB said in its May monthly bulletin.
The ECB wants governments to address the core of the Eurozone debt crisis by implementing structural reforms and spending cuts after it lent support by lowering interest rates and injecting more than €1 trillion into financial markets.