(Reuters) - The European Commission will check euro zone countries' draft budgets to verify if they are in line with EU rules and will ask for changes if they are not, under a deal struck on Wednesday with the European Parliament.
After months of wrangling, EU lawmakers backed the new powers for the Commission, the EU executive, to further strengthen euro zone budget discipline and prevent another sovereign debt crisis.
The new law, called in EU jargon the "two-pack", complements the existing budget rules, tightened at the end of 2011 through the introduction of swifter financial sanctions for those breaking deficit and debt limits.
It gives the Commission an extra level of oversight on member countries' budgets. Governments of course are free to ignore the commission's recommendations but risk EU legal action by doing so.
1. It almost seems inevitable that at some point the EU will disband or there will become,
effectively, United States of Europe.
Once Europe started on the road to open borders with each other for travel, trade, work and immigration, many were going to come to the conclusion that a common currency makes more sense than 30 different currencies on the continent. (Imagine how much more cumbersome it would be to travel and do business in the US if each state had its own currency.) But having a common currency requires (though it has been largely absent up to now) a common fiscal and economic policy-making structure.
Of course, there is a lot of resistance to this trend in the UK and in many other European countries. It will be interesting to see which path Europe follows: a continuation of the present 'half country (freedom of movement, trade, work and immigration), half-association (sovereign national budgets and fiscal policy); a gradual (or swift) decline in the EU and its eventual disappearance; or a trend towards further integration with the eventual trappings of a national government.