The European Central Bank’s headquarters in Frankfurt am Main, Germany, on 29 April 2019. (Daniel Roland – AFP/Lehtikuva)


FINLAND continues to have reservations about the creation of a dedicated budget for the eurozone.

France and Germany unveiled their joint proposal for establishing the eurozone budget in February, envisioning it as a tool to promote growth and competitiveness, and reduce the development gap between different member states, according to Reuters.

The duo proposed that the financial instrument draw its funding from a number of sources, including revenues derived by eurozone countries from, for example, the planned financial transaction tax. Finance ministers from members of the monetary union have two months to agree on the budget’s broad elements, such as spending priorities and the source of revenues, writes The Financial Times.

An agreement on the more difficult aspects, such as the size of the budget, is not expected until next year.

France initially proposed that the budget be equivalent to several per cent of the bloc’s gross domestic product, but it has since scaled down its expectations to around 0.2 per cent, according to YLE.

Finland has expressed its reservations about the notion of a dedicated budget along with its fellow opponents: Denmark, Ireland, Latvia, Lithuania and the Netherlands. The countries have adopted a common position on the budget, arguing that participation in it should be voluntary as long as the funding is derived through intergovernmental agreements.

Committees of the Finnish Parliament have previously warned that the intergovernmental structure could undermine the possibilities to monitor spending and viewed that the eurozone should be developed primarily within the framework of EU treaties.

Finland has also viewed that the budget should not be a tool to smooth out economic swings but to promote competitiveness and economic integration in the euro area.

“Finland approved the creation of a budget instrument for the eurozone in the summit in December. But Finland doesn’t want it to become a rapidly growing new element, a new channel of public expenditure. We want to keep it small and part of the whole budget of the EU,” Tuomas Saarenheimo, a state undersecretary at the Ministry of Finance, told YLE in February.

The finance ministers of both current and aspiring eurozone countries have discussed the budget on a monthly basis during the course of this spring. The ministers are set to convene again in two weeks’ time.

Aleksi Teivainen – HT
Source: Uusi Suomi