TALLINN - European leaders agreed last week to amend regulations for fiscal policy in eurozone countries, temporarily laying to rest one of the most contentious issues for the 12 nations that share the common currency.
The European Council, the body uniting the EU's heads of state, endorsed a series of amendments to the Growth and Stability Pact, which regulated fiscal policy in eurozone countries. One of the amendments includes a provision that would allow a country to exceed the 3-percent budget deficit rule if certain "quality" expenses 's scientific, research and development and political goals (unification of Germany) 's were made.
German Finance Minister Hans Eichel said the amendments would strengthen the pact, while critics said they would allow any country to exceed the deficit limit. Germany has breached the limit for three years straight, with last year's deficit hitting 3.9 percent of GDP. "More important than a decimal in the deficit is whether a member state pursues the right fiscal and economic policies - in the sense of sustainable consolidation of public authorities," Eichel said.
Estonian Finance Minister Taavi Veskimagi, who took part in the council meeting, regarded the results as good and believes they will facilitate more rational economic management of the member countries' budgets.
"Although I admit that this means stepping on slippery ice, which may trigger certain growth in EU budgetary expenses, I am glad that a working compromise was reached and all the ministers agreed with the addition of the provision, under which exceeding the 3 percent ceiling could only be temporary," Veskimagi said.
"The most important thing is that the pillars of the economic policy remain unchanged. This secures our adoption of the euro as part of a stable economic system," the minister added.
