Wall Street Journal
May 10, 2011
The backbone of the European Union’s “comprehensive response” to the sovereign debt crisis faces a key hurdle at next week’s meeting of finance ministers on May 17.
The package of six economic reforms is the legal framework for the EU’s plans to monitor member state budgets, recommend policy changes and punish governments that consistently step out of line. But a political tug-of-war has sparked concerns that its adoption will be delayed.
EU heads of state and government have promised to sign-off on the reforms by a June 24 summit.
Timing is not inconsequential. Further delays could spell trouble for stressed government bond markets. In addition, the European Commission is scheduled to recommend changes to national budgets, kicking off the process set out in the framework, on June 7. Without a legal grounding, the commission’s proposals will be rendered meaningless.
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