EU can't agree on how to halt rule-breakers
There was no agreement among EU leaders on how to punish countries that break the bloc's debt and deficit limits, Taoiseach Brian Cowen confirmed yesterday.
The quandary facing the 27-member union is how to make sure profligate states never again bring the single currency into disrepute as events in Greece, Ireland, Portugal and Spain continue to animate bond markets.
Before the summer, leaders signed up to allow their peers greater scrutiny of spending plans and a new timetable for submitting budget outlines to Brussels, but deep divisions remain over what kind of sanctions to apply to those countries that persistently flout the rules.
Punishing countries by removing agricultural subsidies or infrastructural assistance has been mentioned by some German diplomats, but has encountered French opposition.
"There is a question of improved monitoring and surveillance of economic governance issues," Mr Cowen said after the briefing.
"But the question of sanctions issues is still under discussion. There is no agreement at this stage," he added.
A special task force set up by the president of the European Council of leaders, Herman Van Rompuy, is due to conclude its work in October, leaving him with just weeks to forge an accord between those calling for stringent punishment for offenders and others worried that sanctions could unfairly target certain blocs of countries.
He moved to dampen pessimism about the group's work after Thursday's meeting, saying: "Last spring we won the battle of the euro and next month we'll draw the final lessons of this crisis."
However, an internal task force document seen by the Irish Independent reveals the complex legal and technical issues currently facing officials working on the final report, with difficulties arising over how and when the sanctions would kick in.
There are also problems over the punishment to be meted out, with fines applying only to the 16 members of the single-currency zone as the most likely option, and something that would please France and Germany.
Ireland's deficit is currently quadruple the recommended limit and the highest in the European Union.
The Government has been told to bring it down below 3pc of gross domestic product by 2014.
Mr Cowen said that he was working very closely with EU authorities to make sure that Ireland meets its deadline.
"There's absolutely no room for complacency. We will continue to monitor the situation," he said.