Today, the Economic and Financial committee (ECON), in a dramatic and close vote, rejected by 25 to 25 votes the proposal for an opinion on the Commission’s proposal for the transposition of the Fiscal Compact into EU law. The intergovernmental Fiscal Compact of 2012 regulates how member states must control deficits and debt. It thus regulates the same issues in a slightly different way as the reformed rules of the Stability and Growth Pact. In a crisis, for example, the changes can decide on unemployment and poverty. The Fiscal Compact stipulates that it must be converted into EU law. However, the Commission had now chosen a legal basis which provides for a decision to be taken solely by the Council of the Member States and merely grants the Parliament an opinion (Article 126(14) of the Treaty on the Functioning of the EU). The Greens, the Socialists and the Left today rejected the legal basis chosen by the Commission because, on the same issues of long-term budgetary planning, EU laws have already been adopted on a different legal basis (Article 121(6) of the Treaty on the Functioning of the EU), providing for an equal decision by Parliament and the Council. Exactly half of MEPs now share these concerns.
The ECON Secretariat is currently examining the legal consequences of the rejection of the Committee’s position today. As Greens, we call on the Legal Affairs Committee (JURI) to examine whether the legal basis chosen by the Commission is admissible. A study commissioned by the Committee on Constitutional Affairs (AFCO) suggests that the previous legal basis is not admissible.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
„Parliament’s No to the Fiscal Compact Opinion is an important signal. A transfer of the Fiscal Pact into EU law in an hasty procedure has thus been stopped. Decisions between public investment and austerity must never be made without parliaments. The rules of the fiscal compact are even more pro-cyclical than the reformed Stability and Growth Pact.
The EU’s budgetary rules can only be changed in full codecision with the European Parliament. EU law passed in codecision may only be amended in the codecision procedure. It is sad that Christian-Democrats, Liberals and right-wing conservatives today wanted to jointly undermine the democratic rights of the European Parliament. It is a great success that they have failed for the time being. The common decision of Parliament and the Council is important in order to ensure a balance between the rules. European laws must be adopted in unassailable, legitimate procedures. Parliament’s Committee on Legal Affairs must now begin its work and review the chosen legal basis. Only on this basis can the European Parliament take a decision“.