European Commission proposes 'peer review' for national budgets

A proposal published by the European Commission today could see Ireland and other eurozone countries required to submit their budgets in advance for 'peer review' by other Member States before they could be adopted by the national parliament.

Taoiseach Brian Cowen has insisted the move is merely a proposal up for discussion in the wake of the economic crisis, to avoid a repeat of the financial meltdown that has affected Greece.

Fine Gael leader Enda Kenny has however said adoption of the proposal would result in the State handing over economic sovereignty to Brussels.

Announcing the move, Commission President Jose Manuel Barroso insisted it would strengthen the EU's Stability and Growth pact.

"Europe has dealt with the immediate emergency," Mr Barosso said.

"Today, the Commission sets out what we need to do to strengthen Europe's economic governance."

The Commission proposes to align national budget and policy planning through the establishment of a "European Semester" for economic policy coordination, a statement said.

The intention is to enable member states "benefit from early coordination at European level as they prepare their national budgets and national reform programmes".

"An early peer review of fiscal policies would help shape a fiscal stance for the EU and the euro area as a whole."

After initially refusing to comment on what was speculation, once the proposed measures were announced the Taoiseach insisted all the issues were still open for discussion.

But Deputy Kenny said there was a risk of a sell-out by Government

"Is he (Mr Cowen) really of a mind to sign up to a proposal such as this, that would amount essentially to the handing over of sovereignty of the Irish state?" Deputy Kenny asked.

He went on to say that it could see Europe telling us to scrap our low rate corporation tax, putting jobs at risk.