Caving In

COMMISSION 'CAVING IN' TO FRANCE AND GERMANY

North West Tory Euro MP David Sumberg is slamming the European Commission for buckling under pressure from France and Germany to relax the punishments on eurozone countries which break budget rules.

The EC is proposing reform of the Growth and Stability Pact by broadening the definition of "exceptional circumstances" under which eurozone countries can breach the budget deficit limit of three per cent of gross domestic product without being punished.

But Mr Sumberg said the EC's proposal fatally undermined the single currency - and the European Union.

"The EC's proposal is a direct response to the massive pressure it has been put under by France and Germany,' he said. "But by loosening punishments the EC only succeeds in making it easier to undermine the single currency - creating more tensions between member states. The EC has shown a remarkable lack of teeth in its refusal to punish France and Germany despite the fact they have repeatedly flouted the pact's three per cent deficit ceiling. Moreover Greece has admitted to seriously understating the true extent of its budget deficit, which was recently revealed to have topped five per cent, over several years. Instead of wavering and backing down under pressure the EC should be reading the riot act to countries which break rules."

Mr Sumberg said the EC's proposal showed precisely how unstable the euro is and how Britain's economy is far more secure outside the eurozone.

“We must never surrender control over our currency to Europe,' he said. "Neither the EC nor anyone else has yet come up with a workable and politically feasible way to deal with the problems caused by a single currency - which covers 12 countries with different budgets, treasuries, priorities and economies. My concern is that these problems will only intensify with enlargement of the eurozone."