Stringent EU budget rules come into force

STRINGENT and comprehensive new budget rules for EU governments backed up with tough penalties come into force today and are similar to what the new inter-governmental fiscal compact aims to reinforce.

Euro Commissioner Olli Rehn, commenting on last week’s summit, said he regretted that EU leaders had to resort to an inter-governmental agreement because the British vetoed putting the measures into the EU Treaty. However, he reminded Britain their institutions would be subject to the same financial sector regulations as in the rest of the EU.

“If this action was intended to prevent the City being regulated, this is not going to happen. We must all draw lessons from the ongoing crisis, and this goes for the financial sector as well . . . Britain will be subject to the same surveillance as other countries even if the enforcement applies mainly to the euro states,” he said.