European Commission to inspect Estonian budget

Liina Valdre
, reporter
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Photo: SCANPIX

This fall, for the first time in history, eurozone states are to present their budgets to be reviewed by European Commission.

Estonia is yet to submit its draft budget to the commission, deadline looming at the start of next week. Thereafter, commission has a month to issue an assessment – positive or negative. 

Commission has no rights to veto the budget, nor can its halt its domestic procedures in any other way. A negative assessment might be issued if, in the commission’s eyes, the budget deficit would be too big and it the state seemed unwilling to take measures to cut that. In all probability, Estonia with its conservative finance policy will not have to fear such treatment.

Commission’s assessment will be accompanied by a thorough analysis, which Riigikogu will be able to use at further deliberations.

It is European Union’s desire to show itself a mighty economic power. The recent economic crisis has granted the union the opportunity to start taking decisions of a more forceful nature – hardly acceptable for many member states, if not for the crisis.

Also, the crisis has served to reveal various weaknesses in the system, which are now attempted to be fixed. A part of the fix being a «two pack» approved this spring, providing the framework for the commission to inspect the budgets.

Up to now, birth of budgets has been a kind of a blind spot at EU level, the update being aimed at preventing unexpected problems. However, the aim raises an important issue: do the commission’s steps pose a risk for member state sovereignty in taking budget decisions?

Basically, nothing much should happen with states with healthy draft budgets, the update not granting the commission rights to amend draft budgets nor impose its opinion on states. Primarily, the commission has acquired additional means to make proposals.

The commission’s assessment alone is indeed nothing but advisory, by nature; even so, it injects obvious input into further discussions amongst finance ministers, the latter able to issue binding recommendations to member states and impose sanctions, if necessary.

Comment

Carri Ginter, docent of EU law at University of Tartu Law Faculty

Parliamentary right to decide how and where a state spends its money is a vital part of a state’s sovereignty. This is definitely prejudiced by subjection to European Commission control. At the same time, we are also parties to international agreements, the keeping of which is in our national interests. Should things really get critical for Estonia, we will have the option of contesting the commission. Payment orders are still signed in Estonia, after all.

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