EU may fine countries for overspending

TEXT OF STORY

BILL RADKE: Protesters — tens of thousands of them — are marching today in Brussels, Belgium. The marchers are angry that European banks were bailed out and now governments are cutting their deficits by slashing spending and pensions,
and hiking taxes. Meanwhile, the European Commission announces plans today to stop member countries from overspending.

The BBC’s Rebecca Singer reports, governments that borrow too much money will be hit with fines.

REBECCA SINGER: The move follows the Greek debt crisis that threatened the future of the euro. And the EU wants to come down hard on any country that may threaten the stability of the eurozone in future. Governments that fail to comply with strict limits on budget deficits and national debt they will be fined. And countries whose economies are veering out of control — like we’ve seen in Ireland and Spain — will have to show how they plan to get back on track.

Carsten Brzeski is senior economist at ING Belgium and says steps like this are necessary to restore confidence after the Greek fiasco.

CARSTEN BRZESKI: I think right now we have this window of opportunity to do something and to implement measures to show that Europe has learned its lessons from the sovereign debt crisis so I think they’re going to be effective.

Europe already has a system of fines in place, but this will simplify the process so countries can’t wriggle out of punishments as easily. And the EU commission believes that a stable economy is the best way to keep jobs safe.

In London, I’m the BBC’s Rebecca Singer for Marketplace.