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The EU's discipline dilemma: austerity or growth

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The EU's discipline dilemma: austerity or growth

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Three months after it was conceived the so called ‘Fiscal Compact’ is ready to sign. 25 out of 27 EU countries have agreed to adopt the treaty aimed at stricter budget discipline to control the bloc’s debts. But as leaders prepare yet again for another summit in Brussels fresh doubts have emerged.

Dublin’s decision to hold a referendum potentially creates more uncertainty around a pact that was designed to do the complete opposite. An Irish ‘No’ vote would not be enough to derail the new fiscal agreement but it would jeopardise Ireland’s long-term financing prospects should it need another EU handout.

Little more than a week after agreeing a second Greek rescue Europe’s leaders will also gather to strengthen the bloc’s bailout funds. In addition, the tricky question of how to balance the need for austerity while finding new ways to stimulate growth is also sure to be on the agenda.

With Denmark currently holding the six-month rotating Presidency of the EU and ahead of the two-day summit in Brussels, we spoke to Margrethe Vestager, Danish Minister for Economic and Interior Affairs about the plans for growth. To see the full interview, click on the link above.