EU takes first step to
 overhaul fiscal rules

The European Commission took the first step on Wednesday to overhaul the fiscal rules that underpin the euro by launching a public consultation to help find common ground among deeply divided governments.

The complex and often shunned rules, called the Stability and Growth Pact, say European Union governments should keep budget deficits below 3 percent of gross domestic product and public debt below 60 percent of GDP.

A lax approach by some governments and outright cheating on statistics by Greece caused the sovereign debt crisis in 2010 that nearly destroyed the single currency. 

It left the eurozone deeply divided, with the fiscally strict northern EU countries accusing the south of profligacy, and the south criticizing what they see as the north’s obsession with debt reduction.

“We’re looking forward to an open discussion on what has worked, what has not, and how to build consensus for streamlining the rules and making them even more effective,” Commission Vice President Valdis Dombrovskis said.

[Reuters]