Dijsselbloem concerned about flexible application of Stability and Growth Pact rules

Dutch finance minister and ECOFIN Chair Jeroen Dijsselbloem worries that the way in which the EU Commission applies Stability and Growth Pact rules may not be entirely objective, he told Economic and Monetary Affairs Committee MEPs yesterday. At a meeting reviewing the Dutch Presidency of the Council of Economy and Finance Ministers, he said he hoped that on Friday 17 June they would agree a road map for completing the Banking Union with a European Deposit Guarantee Scheme (EDIS).

Several MEPs asked Dijsselbloem about his criticism of Commission President Jean-Claude Juncker, who had hinted the Commission’s treatment of France under Stability and Growth Pact differs “because it is France”. “If we have an agreement between us, it is important that all of us comply. The role of the Commission is crucial when it comes to interpretation of flexibility rules and if member states feel that the Commission’s decisions are not objective – that big countries are treated differently than small countries – that worries me. Ministers are concerned. The Commission is the guardian of the treaties and should act on clear, transparent and objective grounds”, Dijsselbloem explained.

Dijsselbloem said he hoped that ministers at the 17 June ECOFIN meeting would agree a road map for completing the Banking Union by 2024. Several MEPs urged that it should be done sooner. Others expressed concerns about the balance between risk reduction and risk sharing, given that the banking sector is not equally robust in all member states. Dijsselbloem said that the single resolution fund for failing banks would be filled gradually until 2024 and that the same went for a deposit guarantee insurance scheme. “But meanwhile, many banks have to cope with non-performing loans and high concentrations of sovereign bonds on their balance sheets and this needs time to be dealt with”, he said.

Asked about German Finance Minister Wolfgang Schäuble’s remarks on the UK’s EU referendum – that “In is in, out is out” – Dijsselbloem said that, based on the Dutch experiences with referendums, “it is of no use to threaten the voters.” But there is a good argument for European cooperation, he added. “Take the example of immigration. Problems don’t go away if the UK decides to leave the EU (…) I want the United Kingdom to become an active EU-member again. ”

Asked why the Dutch Presidency had not managed to strike a deal among ministers on the draft EU anti-tax avoidance directive, which should translate the OECD action plan against base erosion and profit shifting into EU law, Dijsselbloem said he wanted it to be “a strong and credible directive, not a watered down compromise.”