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Translated from the French
"As you know, the draft budget for 2014 is the first since the entry into force of the EU regulations called "two-pack". We have to understand finally that we cannot have a monetary union but an economic and fiscal 'dis'union. And we can no longer tolerate that a country can let its deficits spiral and thus risk the macro-economic stability of the entire eurozone. Within the euro area, and because of the close cooperation that we have agreed between us, the economic, fiscal and banking problems of every single member can quickly become everyone's problem.
In order to avoid this risk, the Member States, including France, have been working together since 2010 to construct a new economic and fiscal governance based on clear rules and enhanced coordination. This is reflected in particular by a new common agenda to strengthen the dialogue between the European Commission and the national parliaments when it comes to the preparation of the national budgets. For the first time this year, all members of the eurozone have to submit their draft budget to the Commission. The Commission will then issue an independent public opinion on the draft for each country by November 15.
The first thing I would like to point out is that this public opinion is not an instruction. It is the practical implementation of the new regulations of the eurozone. Do we prefer to let deficits and unrealistic expectations accumulate before reacting? This has been done far too extensively in the past. Secondly, the issued opinion is by no means a right of veto of the Commission on the national budgets: each national parliament retains its full sovereignty in the matter. Having been an MP and and member of the Finance Committee in France myself for 15 years, I would have found it very useful to receive a totally independent opinion on the draft budget of the government. I would also have found it valuable to have an objective perspective on the fiscal situation of our neighbours.
This will now be the case since the opinion issued on each country will be public and the European Commission will submit a report to the Eurogroup on the budgetary situation that would result, for the euro area as a whole, if those 13 draft budgets were to be adopted. Countries in macro-economic adjustment programmes - Ireland, Greece, Cyprus and Portugal - will not submit their draft budgets as they are being monitored more frequently, on a quarterly basis.
The new autumn schedule established by the "two pack" will be organised in conjunction with the "European Semester": it will allow for the budgetary recommendations of spring to be effectively reflected in the budget. On the one hand, we are now more aware of the importance of public debt, since the entry into force of the "six pack" in late 2011 which corrected some weaknesses of the Stability and Growth Pact. To ensure that debt is brought under control is a necessity. We cannot continue to jeopardise the future of our children and expect them to solve the problems created by our current expenditure. On the other hand, the rules take into account the structural balance over the economic cycle: they avoid that states relax their efforts at a high point of a cycle and ensure that only fiscal policies that are not in accordance with the country's commitments to the European recommendations can be punished and not a sudden deterioration resulting from the economic situation.
I would add that the new autumn schedule (the "two-pack") is there precisely to help members of the eurozone to avoid sanctions because countries will see how the recommendations for each country made in the spring are included in the draft budgets for the next year, and if necessary, it will allow states to make adjustments. The new rules of the "two-pack" are useful for both parliaments and governments of the euro area Member States.
Basically, what we do can be described as a "monitoring group" for the mutual evaluation of economic and budgetary policies."
Full speech (in French)