EU economic talks draw a blank

Schaeuble said Europe would ‘have to be a little bit patient’ in finalising the details of an agreement [EPA]

Plans to radically re-draw cross-border economic government across Europe have hit a stumbling block, 10 days from a deadline for concrete action set by European Union leaders.

The fourth meeting of a “task force” set up by Herman Van Rompuy, the EU president, which was charged with learning the lessons of the global financial crisis and the debt chaos it left in its wake across the eurozone, ended without agreement in Brussels

Ivan Miklos, Slovakia’s finance minister, said the meeting in Brussels had ended with “too many voices, too may views”.

“The discussions are stuck, there’s a block,” a European diplomat told the AFP news agency after some four hours of talks.

“It can’t be ruled out that with signs of economic trouble up ahead, certain governments are less inclined than before to toughen budgetary discipline.”

An “in-depth discussion on national fiscal frameworks, macro-economic surveillance and sanctions,” according to Van Rompuy, resulted in an order for experts to “pursue their work” enabling him to complete his “oral” report to national leaders at a summit on September 16.

However, a six-line statement made no reference to detailed ideas repeatedly raised over recent months including potential “financial sanctions” for persistently wayward eurozone countries.

Slovakia is one of nine eastern European member states that have newly issued a demand that the costs of pension reform be written off in their deficit and debt reporting, adding a new complication to the drive to craft automatic sanctions for offenders.

Miklos stressed that “if we want to consider debt as part of the sanctions, this is connected,” but warned that “there are a lot of open questions” which resulted in what he termed “insufficient progress”.

Ministers broadly agree that the EU’s Stability and Growth Pact, which restricts room for maneouvre with national finances, needs to be strengthened, but they appear no closer to seeing eye-to-eye on when automatic penalties should kick in.

Wolfgang Schaeuble, Germany’s finance minister, said Europe would “have to be a little bit patient” in order to come up with “creative better rules for the preventive character of the [pact]”.

Others, though, gave a more upbeat assessment, with Christine Lagarde, France’s finance minister, saying that while there were no “milestones at this stage,” they had held “very good discussions” within the context of “an overall package”.