Euro-MPs slam revised EU budget pact as 'unacceptable'

(BRUSSELS) - Top European Parliament lawmakers sharply criticised a new draft of the European Union's pact to tighten fiscal discipline on Wednesday, saying it was incompatible with EU laws.

"The latest draft of the treaty on reinforced economic union is unacceptable -- Parliament could not endorse it as it stands," the Euro MPs said in a joint statement.

The four lawmakers, from the conservative, centrist and left wings of the parliament, represent the legislature in the working group tasked with drafting a "new fiscal compact" to keep budgets in check and deepen integration.

While the 736-member parliament, the EU's only directly-elected institution, was invited to take part in the process, it has no power to veto the pact.

The latest version of the text, obtained by AFP, foresees lesser roles for the European Commission and the EU Court of Justice.

The MEPs -- Elmar Brok, of the conservative group, Roberto Gualtieri of the Socialist bloc, Guy Verhofstadt of the liberal parties and Daniel Cohn-Bendit of the Green group -- called for "parliamentary participation in the reinforced economic coordination."

The latest draft "is not compatible with the existing EU treaties," they said. It also fails to respect the "Community method"' of decision-making, in which EU institutions rather than national capitals have the major say.

"Specifically, the draft does not guarantee that any decision to implement the new agreement would be taken via the normal procedures laid down in the EU treaties to ensure proper democratic scrutiny and accountability."

An initial version had given Brussels the power to take a nation that violates budget rules directly to court, but the new text now says only individual nations can do that.

The role of the EU's top court too is to be limited to checking that nations enshrine the "golden rule" of balanced budgets into their constitutions.

In the latest previous draft, the court would have scrutinised budgets, notably to police deficits.

But countries such as France opposed giving the judges powers over national budgets right from the start, though Germany favoured a strong role for the Luxembourg-based court.

Last month, leaders of all EU nations bar Britain agreed to join the pact after governments breached existing toothless budget rules for years, ignoring a deficit limit of 3.0 percent of gross domestic product and debt ceiling of 60 percent of GDP.

Britain's refusal to join the effort to deepen integration has angered its partners.

The pact is to be finalised this month and signed at a March summit.

The new draft says 12 national ratifications are needed for the pact to come into force, down from 15 in the previous version.