Governance reforms put on hold, again

Major differences between member states on now to proceed.

The summit revealed the large differences among member states on strengthening economic governance in the EU.

Leaders pledged in June to agree a comprehensive package of reforms to improve monitoring and policing of national economic and budget policies by the EU leaders’ summit on 28-29 October.

Diplomats said in the run-up to the summit work in a ministerial taskforce charged with agreeing the reforms had stalled because of differences over broad principles and fine detail.

Van Rompuy, who chairs the ministerial taskforce, gave an updated report on work in the taskforce to EU leaders over lunch. The discussion which followed revealed that member states are fundamentally divided over what kind of sanctions should apply to countries that fail to respect EU rules.

Voting rights

The splits are over whether member states that break budget rules should have EU funds suspended, and whether member states should temporarily lose their voting rights in the Council of Ministers if they persistently fail to observe budget rules. They are also split over whether the Lisbon treaty needs to be amended to allow voting rights to be suspended.

“A lot of sanctions issues are still under discussion,” Brian Cowen, Ireland’s prime minister, said. “There is no agreement at this stage,” he added.

Van Rompuy said after the summit that the package of reforms due to be agreed in October would not include changes to the Lisbon treaty. “It is a real possibility that we work further after October on all that goes beyond the current treaties,” Van Rompuy said.