Whilst the eyes of the world and the media have been turned to Libya, the EU has been busily beavering away to strengthen its control over EU memebr states economies. The EU is close to agreeing six powerful new measures to control EU economies, and to create something like a single economic policy for the whole zone.
Shocked by the debt and deficit crisis enveloping it, France and Germany have encouraged the Commission and Parliament to come up with ways of enforcing the favoured debt and deficit ratios of the EU, and ways to proceed to a full blown common economic policy, including social and wage policy as well as overall levels of spending, borrowing and taxing.
The EU proposes an economic semester. This is a posh way of saying member states have to submit their national budgets as homework to be marked by the Commission. If the Commission disagree they can order the member state to change their approach. The EU wishes to enforce the old rules of deficits below 3% GDP per annum, and total state debt below 60% of GDP. They intend to fine member states who do not achieve this or who do not follow an agreed plan to sachieve it. The latest version proposes a 0.5% GDP fine for fudging accounts, and a variable fine of 0.1% or 0.3% of GDP for failure to follow the policy. Members outside the Euro may remain beyond the fines, but there is talk of them losing EU spending instead.
There will be an imbalances and excessive imbalances procedure to allow the Commission to intervene in most aspects of economic governance. The Europact which is also being floated goes even further and brings together social and wages policies for all participants.
We will be told that as the official sancitons do not apply to the UK outside the Eurozone we should not worry. We need to read the final small print, but it looks as if these proposals will represent a further major extension fo EU power which is danger of dragging us in even though we are not members of the Euro.
The EU is creating an economic sovereign to seek to rule its unruly states and currency. Some of its rules make sense, but if we wish to remain in something like a sovereign country we should make it clear none of these new economic government rules apply to us. Just exempting ourselves from the larger sanctions is not sufficient.