A UK minister has denied that the government would submit its draft budget for review by the EU before presenting it to the national parliament.  

Speaking in Luxembourg after a meeting of EU finance ministers, Mark Hoban, a junior finance minister, said that details of the national budget “will be presented to parliament first.” “There is no question of anyone other than MPs seeing it first,” he said.

Contradicting claims

Hoban’s statement appeared to contradict claims made by Herman Van Rompuy, the president of the European Council and chairman of a taskforce working on tougher economic governance rules.

Van Rompuy said last night, following a meeting of the taskforce, that member states would, in future, submit “national budgetary plans” to the European Commission and EU finance ministers for review. The Commission would analyse them, and then propose draft recommendations to be discussed and adopted at ministerial level. He said that the measure was an important step to prevent member states from pursuing irresponsible fiscal policies.

“A government presenting a budgetary plan with a high deficit will have to justify itself in front of its peers, amongst finance ministers,” Van Rompuy said. He said that ministers had agreed that this budgetary review, or surveillance, would take place in the spring, when budgets are at a draft stage, so that “there would still be time to adjust the plans before the final budget is presented”. Van Rompoy added that the details to be submitted by governments would include levels of growth or inflation, total revenues, total spending and deficit targets.

Irish support

The UK said that, if pressed to submit details on its budget before they have been presented to parliament, it will submit its pre-budget report, which is published by the government each autumn. But it was not prepared to present budget plans that were not already in the public domain, UK sources said. The UK has support in its stance from the Irish government.

Other member states and the European Commission, however, think that governments should provide budget details for review by their EU peers before they are presented to their national parliaments, as it would be relatively easy at this stage for a government to amend its plans in light of the recommendations it had received.

Olli Rehn, the European commissioner for economic and monetary affairs, said that the EU-level review would not involve going through draft budgets “line by line”. He said that what mattered was “broad budgetary guidelines and fiscal balance”. He said that he wanted the review to take place “before budgets are submitted to national parliaments”.

Christine Lagarde, France’s finance minister, said that member states should submit “guidelines” to the Commission and finance ministers while their budgets were at a preparatory stage.

Diplomats said that ministers were also split on whether sanctions against member states with excessively high debt and deficit levels should be applied only within the eurozone, or also to countries outside the single currency.

Van Rompuy said that he would report to heads of state and government at a summit on 17 June on progress that had been made in the taskforce on agreeing economic-governance reforms. The next meeting of the taskforce will take place on 12 July.

Budgetary surveillance

Rehn said that ministers at the meetings today and last night had shown “strong support for reinforcing economic governance in Europe”. He said that he was “very satisfied” at the progress being made in agreeing reforms.

Rehn said that the Commission would present a proposal in July to enact the deal reached on budgetary surveillance. He said that the Commission would present other proposals in the same month to strengthen sanctions against member states with irresponsible fiscal policies and to reduce macro-economic imbalances in the EU.