European Union's Budget and Debt Problems

The EU is preparing to meet for a summit to discuss the budget for the coming years, and to possibly revise the Lisbon Treaty. The MEP (Members of the European Parliment) voted for a 5.9% raise in the budget which the UK and other countries are pushing to reject. The UK prime minister David Cameron is calling for a budget freeze, however it is more likely that the EU will settle on a 2.9% increase. There is also the issue of a new Franco-German resoluton referred to as the Deauville Deal. This deal is pushing for a proposal to tempoaily strip repeat overspenders of voting rights in the EU until they change their ways. The country that this treaty is focusing on in the present situation is Greece. The deal also proposes the creation of a permanent financial resuce fund and other sanctions on countries which go over the maximum debt level allowed under the EU's stability and growth pact (60% 0f the GDP). Germany, France, and Finalnd are the only countries so far to back the removal of voting rights for certain countries, and the UK said: "A mechanism to ensure stability in the eurozone is desirable - and the sanctions would not apply to the UK." However, the UK has not come out in direct support of the removal of voting rights. If there were to be a removal of voting rights that would mean that the Lisbon Treaty would need to be revised. However, a revision to the Lisbon Treaty would create major disruptions and political problems in many EU states, and the European Commission President said that the removal of voting rights would never be accepted by all 27 EU states. This will stand to be a great test for a treaty that has only been effective since December of 2009 (less than a year), and whether it will be able to hold the European community together is yet to be seen.

For more information see the article on BBC at http://www.bbc.co.uk/news/world-europe-11642055

By: Colin Zimmerman