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Ecofin discusses budget rules and stress tests

Ecofin discusses budget rules and stress tests
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A pivotal meeting of European Union finance ministers started on Monday in Brussels, negotiating stricter budget discipline rules for EU governments so that those rules can go into effect next year.

Under discussion is how to toughen their policing of each another’s economic policies.

The ministers also hope to agree final details of bank stress tests and how countries will respond where those tests show signs of vulnerability.

Governments should have sufficient national funds to help boost the capital of weaker banks, but some may want to turn to special EU rescue funds.

At the meeting Slovakia is coming under pressure to sign up to the support mechanism for euro zone countries in financial trouble; the leaders of the country’s new government want to re-negotiate the terms of their contributions.

The other 15 euro zone states say they cannot do that.

Pressure is mounting on Slovakia because the fund is a crucial part, together with stress tests of EU banks, of Europe’s efforts to restore confidence in financial markets after the Greek debt crisis.