THE EUROPEAN UNION SHOULD STAY OUT OF NATIONAL BUDGETS

According to the EU Observer Jean-Claude Juncker, prime minister of Luxembourg and current head of the EU, strongly disagrees with German chancellor Gerhard Schröder on narrowing the Commision's powers over national economic policy.

Mr Schröder has asked that the stability and growth pact be relaxed by not counting certain kinds of public spending to the deficits. He also wrote in the Financial Times that "...intervention by European institutions in the budgetary sovereignty of national parliaments [should be] permitted only under very limited conditions.". Mr Juncker meanwhile states that the Commission their right to initiate deficit procedures against sinners. "EU leaders and finance ministers will not become more important by forcing the Commission to its knees" as he put it.

I agree with Mr Schröder on this one, for pretty much the reasons brought forth by the Economist in this leader. One of the main problems with having the Commission dictate the fiscal policies of national government is what is usually described by the EU sceptics as the democratic deficit. I'm sure this is not the argument Mr Schröder would put forth (he's probably mostly interested in avoiding the fines), but I think it makes for a rather strong case. In a national election the way to run the state budget is one of the most important differences between the parties involved, and whether to cut taxes and spending or to do the opposite is one the strongest defining lines between right and left. Also, it seems more reasonable if those elected by the taxpayers decide how their money should be spent, than having people chosen by heads of government from 24 other countries decide.

But isn't it necessary to keep some sort of control among the euro-countries in order to avoid having one irresponsible country bring down the others? The Economist things not, and points at recent experience. It seems as if the financial markets manages to punish those that deserve it (which is what happened to Italy).

The EU should do what it does best and leave others to do the rest. Micromanaging national budgets lies outside of it's area of expertise.

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