Oostenrijk wil nieuwe sancties voor schenders Stabiliteitspact (en)

Austrian finance minister, Karl-Heinz Grasser yesterday (26 May) proposed a radical new punishment for countries such as France and Germany that persist in breaking the strict rules governing the euro.

In comments reported by the Süddeutsche Zeitung, Mr Grasser said that the punishment for such states "must be really applicable" and suggested that they could temporarily lose their EU voting rights if they break the rules for three consecutive years.

Austria is one of the biggest backers of upholding the EU's budget rules, which stipulate that no member of the 12 country euro zone may run a deficit of more than three percent of its gross domestic product.

Under these rules - known in Brussels jargon as the "Stability and Growth Pact - countries can in theory be fined billions of euro if they consistently break this ceiling.

But this "sanctions procedure" was effectively suspended last November when France and Germany - who have broken the rules for the past two years - persuaded their fellow finance ministers to suspend the procedure.

The pact is dead: long live the pact

Referring to these events, Mr Grasser said, "The pact already has its future behind it. It has lost its credibility. What Theo Waigel [former German finance minister, who is known as the founder of the pact] invented, has effectively been buried by Germany".

Under Mr Grasser's plan, both France and Germany - which are expected to break the ceiling next year - would lose their voting power.

The European Commission declined to comment on the specific proposals but welcomed the fact that member states were involving themselves in the debate over economic policy in the EU.

"The engagement of national ministers is, a priori, a positive thing", said a Commission spokesman, adding, "the Commission is working on these issues internally ... our technical work is continuing and we will make proposals when we feel it is appropriate".