The European Union's various institutions are in the throes of redesigning how the bloc vets national fiscal policy – a collection of six proposals called the economic governance "package".
Yesterday (2 February), the European Parliament unveiled its contribution, which included high fines for poor fiscal discipline and fudged national books.
The European Parliament has equal decision-making power to EU member states on four of the six proposals in the package, making it a key player in approving the bloc's revised fiscal rules.
Under the MEPs' proposals, fines for repeatedly ignoring recommendations from the EU's policemen – a mixture of officials from the European Commission and the member states – could reach 0.5% of GDP, a much higher percentage than the 0.1% proposed by the European Commission.
In addition, MEPs want countries found out for fiddling their books, like Greece in early 2010, to receive a one-off fine of 0.5% of GDP.
In June, all three policy players, the European Commission, the member states and the European Parliament, will have to settle on these figures.
Member states likely to reject proposal
Speaking to EurActiv, EU sources predict that member states will throw the Parliament's 0.5% out the window but argue that there is no harm in the Parliament being ambitious to counterbalance policies being watered down by national governments.
It was difficult enough to get national officials to agree to fines at all, let alone a percentage as high as that, the source explained.
'We all agree on the reasoning behind fining and we all agree that fines should not profit other countries," said Elisa Ferreira, one of six MEPs tasked with putting the Parliament's stamp on the economic governance package.
A UK Conservative MEP, Vicky Ford, waded in to insist that fines apply within the euro zone alone, given that the UK lies outside the monetary union with its sterling currency.
Finnish Liberal MEP Carl Haglund, who is tasked with steering through the Parliament proposals on sanctions for repeat offenders, warns it would be unwise to distribute the money made from fines to the other member states.
Instead he suggests the money should go into EU funds to rescue struggling economies, such as the European Financial Stability Facility (EFSF), which has already benefitted both Greece and Ireland.
A second EU source involved in the final decision to be made in June said this was a sensible idea which might see the light of day as officials try to come up with palatable ways to top up the 440bn EFSF, which is made up of member-state guarantees.
