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The new commissioner should be given clear powers to set requirements for the budgetary policy of countries that run excessive deficits.
That is what usually happens to countries that run excessive trade deficits -- foreigners lose confidence in these countries' currencies, interest rates rise, the economy goes into recession and, as people can't afford to buy so many imports, the trade deficit begins to close.
A view is now taking hold among many European leaders that the ever-worsening crisis may result in Brussels being given direct control over the budgets of countries that continue to run excessive deficits — a proposal made recently by the euro's most passionate advocate, Jean-Claude Trichet, former president of the European Central Bank.
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So it will be able to intervene directly in the day-to-day running of any bank which it thinks is running excessive risks with its borrowing or lending.
OK, the German story is that it's about fiscal profligacy, running excessive deficits.
It initiates actions against members for such offences as illegal state aid, running excessive budget deficits or having filthy beaches.
"Above all, we look for managers who have good risk-control systems and who are not running excessive leverage".
On the other side, banks were tightly regulated, so that they didn't take advantage of government guarantees by running excessive risks.
Under the proposals, European Union regulators would be able to recommend suspending farm and fishing subsidies to any of the 27 E.U. member countries running excessive budget deficits.
The delay came amid broad public concern about the financial condition of the F.H.A., and appeared likely to add to questions about whether the agency is running excessive risks with taxpayers' money.
That is a sanction more painful than anything the EU would ever have the will to impose.Even as Brussels types debate the theology of economic governance, the commission is limbering up to rebuke a string of countries for running excessive deficits.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com