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Business

EU proposes Strict Enforcement of Budget Rules

The European Commission unveiled proposals for tougher implementation of EU budget rules on Wednesday. Brussels aims to introduce further disciplinary measures for states, like France and Germany, that fail to keep their debts low. The EU would take into account the entire economic cycle when setting budget objectives. Countries' with low debt will be permitted more room to maneuver to finance investments or reforms. Disciplinary measures would also be taken against states that fail to cut debt.

The EU's current Stability and Growth Pact stipulates that states' deficits may not exceed three percent of gross domestic product, and member countries must aim for broadly balanced budgets. Up to now member states have only been punished for failing to stay below the three percent level.