THE EC TO EXAMINE 2014 EUROZONE COUNTRIES’ NATIONAL BUDGETS

The European Commission is going to check check eurozone countries' draft budgets to verify whether they are in line with EU rules and will ask for changes if they are not (two-pack bundle of legislation). The objective is further strengthen eurozone budget discipline and prevent another sovereign debt crisis. The new two-pack law complements the existing budget rules, tightened at the end of 2011 through the introduction of swifter financial sanctions for those breaking deficit and debt limits.

It gives the Commission an extra level of oversight on member countries' budgets. Governments are free to ignore the Commission's recommendations but risk EU legal action by doing so. All  eurozone governments (except countries receiving financial assistance i.e. Greece, Ireland, Portugal and Cyprus) are obliged to send draft budgets for the following year, based on independent economic forecasts, to the Commission before 15 October for verification. The Commission has until 30 November to come back with its evaluation but it is expected to make its review known  by 15 November.

The new law  allows the Commission to put a country that is "threatened with financial difficulties" under strict surveillance. That means the government would be obliged to deal with the problems that led to the difficulties and be subject to quarterly progress reviews. If the Commission acknowledges serious breaches in terms of deficit, reforms etc.) it may request the Parliament of the member state in question to present a revised draft budget. The principal criteria of the Commision is to judge if the text translates the efforts of the country on  a budgetary level.