MEPs attack euro states for hiding budget data
By Sarah Collins | Friday 22 June 2012
MEPs have blasted Germany, France, Italy and Portugal for refusing to reveal the extent of their future pension obligations or the potential cost of bank bailouts, as agreed under a ‘six pack’ of budgetary discipline rules last year. The four countries are disputing a clause in a recent directive on budgetary frameworks (2011/85/EU), which asks central governments and regions to report certain contingent liabilities - spending that is earmarked for future public pension payments or bank guarantees - if they have a large impact on their budget.
“With memories still fresh of the disastrous consequences of statistical cover-ups in Greece, the Parliament believes it is highly irresponsible behaviour on the part of those member states,” said Sharon Bowles (ALDE, UK), chair of the Committee on Economic Affairs (ECON). “It does make one wonder how many skeletons are left in the European closets,” said Vicky Ford, the UK Conservative MEP responsible for drafting Parliament’s opinion on the budgetary frameworks directive.
The financial crash turned into a debt crisis, in late 2009, after Greece revealed its budget deficit had ballooned to more than three times the EU’s limit, a result of years of statistical falsification hiding the true extent of the government’s spending. The ‘six pack’ was put together to strengthen the Stability and Growth Pact, which sets EU debt and deficit limits, bringing swifter and harsher punishments to bear on countries that fail to correct high spending - the reforms were enacted in part to reverse a watering down of the pact by France and Germany, in 2004.
Three-way talks between the Parliament, Commission and Council - which centre on an implementing measure for the budgetary frameworks directive - have stalled over the issue, with members of Parliament’s ECON committee accusing governments of concealing the full extent of their debts. However, a spokesman for the Danish Presidency said member states already report their pension liabilities in a yearly ageing report, while contingent bank guarantees are listed by Eurostat in its yearly financial crisis tables.
Article 14.3 of Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the member states says: “For all sub-sectors of general government, member states shall publish relevant information on contingent liabilities with potentially large impacts on public budgets, including government guarantees, non-performing loans and liabilities stemming from the operation of public corporations, including the extent thereof. Member states shall also publish information on the participation of general government in the capital of private and public corporations in respect of economically significant amounts.