Indebted States Must Give Up Control of Their Budgets, If they refuse, they should leave the eurozone, Dutch leaders say.
Eurozone nations that consistently break budgetary rules should be forced to surrender control over their budgets to a European commissioner or else leave the eurozone, said Dutch leaders September 7.
Countries that “systematically infringe the rules must gradually face tougher sanctions and be allowed less freedom in their budgetary policy,” wroteDutch Prime Minister Mark Rutte and Finance Minister Jan Kees de Jager in their proposal, which was outlined in the Financial Times. They called for the creation of a commissioner for budgetary discipline with “clear powers to set requirements for the budgetary policy of countries that run excessive deficits.”
This commissioner would require an indebted country to fix its finances. “If the results are insufficient, the commissioner can force a country to take measures to put its finances in order, for example by raising additional tax revenue,” wrote Rutte and de Jager. The nation would also face escalating sanctions from the European Union.
“The final stage will involve preventive supervision, and the budget will have to be approved by the commissioner before it can be presented to parliament,” the politicians said.