EU budget busters may face court under new deal

(BRUSSELS) - A new agreement to push eurozone countries to rein in debt, due to be ready for signing in March, could allow Germany or any other country to drag violators before the European Court of Justice.

An EU official said Friday that negotiations will begin Tuesday between representatives of the 27 European Union states -- including Britain, which still refuses to sign up to the so-called "fiscal compact" agreed at an EU summit on December 9.

These talks are to be "finalised by the end of January," said an EU source, ahead of a planned summit of EU leaders that several EU sources said it all-but set for Friday, February 3.

"Signing will begin in March and entry into force as soon as nine of the 17 eurozone states have ratified," a simple majority, the first source said.

Changes including the introduction of a so-called "golden rule" to oblige states to aim for balanced budgets will apply "immediately" for eurozone countries, even if they have yet to ratify, according to a draft submitted to EU nations for consideration.

For non-euro states that choose to sign up, the new provisions will only apply "further down the line."

In the draft drawn up by EU legal services, designed to translate political commitments made by leaders into legally safe texts that do not contradict the EU's Lisbon Treaty, one chapter gives "any contracting party," or state, the right to drag another "before the Court of Justice of the European Union."

The decision of the court will be binding, the text says.

The official said no political changes were introduced, and that changes were to reflect treaty commitments, "nothing more, nothing less."

States have very rarely taken EU partners to the court down the years, that role normally being reserved for the European Commission, the executive that acts as "guardian" of treaty law.

Talks between euro finance ministers are expected to overlap with these negotiations.

Two EU sources said the ministers will first hold talks on Monday, probably via teleconference.

Monday is the self-imposed deadline for EU leaders to come up with 200 billion euros ($260 billion) of promised loans to boost IMF resources to stabilise the debt-laden eurozone.