Sunday 19 November 2017

Eviction from eurozone for countries who break rules - Dutch PM

Philip Pilkington

The Dutch prime minister Mark Rutte has called for tough new measures including a EU budget tsar with the powers to control countries' taxes and.

He also said countries that do not comply with budgetary rules should be kicked out of the single currency.

"Whoever wants to be part of the eurozone must adhere to the agreements and cannot systematically ignore the rules," wrote Mr Rutte and his finance minister Jan Kees de Jager in an opinion piece in today’s Financial Times.

"In the future, the ultimate sanction can be to force countries to leave the euro."

Mr. Rutte says that having a centralised EU commissioner in control of eurozone countries budgets will ensure that their governments are not allowed to run large deficits.

"Independent supervision requires a commissioner for budgetary discipline," he said.

"The new commissioner should be given clear powers to set requirements for the budgetary policy of countries that run excessive deficits."

Mr Rutte has said that if the countries in question do not observe the new rules the commissioner should have the power to increase pressure on them gradually by choking off the funding currently made available to them through agencies like the European Union Cohesion and Structural Funds.

The Dutch prime minister suggested that if the countries in question continued to run large budget deficits after these sanctions had been imposed the countries' parliaments would have to submit the proposed budget directly to the commissioner for approval and would have their voting rights suspended.

Mr. Rutte has been facing increased pressure from both Dutch voters, who have turned against the bailouts, and his coalition partner the far-right Party for Freedom, which has referred to the Greek bailout as "throwing money over the dikes."

European officials have said that the Dutch government has been one of the most aggressive bargainers over the terms of the bailout, indicating that Dutch voters have significant influence over eurozone debates.

Yesterday the Greek finance minister Evangelos Venizelos pledged to cut 20pc of public sector jobs by 2014 which, although massively unpopular with Greek voters, aims to help Greece meet the conditions of the second bailout as outlined in July.

Meanwhile the markets remain unconvinced of Greece's fiscal sustainability with Greek benchmark 10-year bond yields hitting a record high of 20pc.

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