Kritiek regeringspartij FDP op sanctiebeleid begrotingen (en)
EUOBSERVER / BRUSSELS - Germany's junior coalition partners have criticised the recent EU agreement on budgetary sanctions as being weak, while European Central Bank chief Jean-Claude Trichet i is also unhappy.
Political infighting in Berlin resurfaced on Thursday (21 October) after German foreign minister Guido Westerwelle of the pro-business Free Democrats said sanctions for member states must be free of "political opportunism" and show "authority and assertiveness".
Mr Westerwelle slammed a Franco-German deal on Monday under that Chancellor Angela Merkel i of the Christian Democrats dropped her previous demands for sanctions to apply automatically when countries run excessive budgets.
EU finance ministers meeting in Luxembourg agreed to toughen the bloc's budgetary rules in the wake of the recent eurozone debt crisis, but a political carve-up struck between Ms Merkel and French President Nicolas Sarkozy resulted in a dilution of European Commission proposals.
Ms Merkel accepted French demands to give politicians more control over imposing penalties in exchange for Mr Sarkozy backing German calls to amend EU treaties.
The agreement means rule breakers would only face sanctions six months after being warned, unless they successfully mustered a qualified majority to block the planned financial penalty.
Crucially however, a political decision by a qualified majority of eurozone governments would still be needed to start disciplinary action against a state with an excessive deficit.
As recompense for her surprise u-turn on more automatic sanctions, Ms Merkel won French support to reopen the EU treaties - deemed by Berlin as necessary in order to create a permanent eurozone rescue mechanism, as well as to explore the potential for political sanctions such as the loss of voting rights and a sovereign debt-restructuring mechanism.
On Thursday, the deputy parliamentary head of Ms Merkel's Christian Democratic Union, Michael Meister, said Germany might use the EU's next expansion as an opportunity to enact rules forcing bondholders to share the cost of state bailouts, reports Bloomberg.
"The entry of new member states requires treaty changes," Mr Meister said in an interview in Berlin, pointing to Croatia's expected EU accession in 2012 or 2013.
ECB President Jean-Claude Trichet has also indicated he is unhappy with this week's deal to step back from semi-automatic sanctions for states who run deficits in excess of three percent of their GDP, the EU limit.
"It is correct that the president of the ECB does not subscribe to all elements of the report," an ECB spokesman said.
On Wednesday a footnote highlighting Mr Trichet's reservations was inserted into an annex of the agreement between EU finance ministers who were working under the guise of European Council President Herman Van Rompuy's taskforce.
EU heads of state will discuss the proposed rules at a summit next week. After that, they must be approved by the European Parliament.