Negotiations on the crucial package of legislative measures on economic governance hang in the balance over differences between the European Parliament and certain Member States on the degree of latitude to grant to the European Commission to initiate a procedure to sanction individual countries. Parliament is due to affirm its position tomorrow at mid-day in Brussels.

In response to a request for clarification on the Commission's position today in the plenary chamber  from Guy Verhofstadt, the Commission President confirmed that they supported Parliament's insistence on a strong community method and the use of the reversed qualified majority procedure (QMV) for launching sanctions against Member States who breach the deficit limits enshrined in the Stability and Growth Pact.

"I warmly welcome Mr Barroso's statement today in plenary that puts beyond doubt that the Commission is standing full square behind Parliament in its legitimate insistence that the new rules on economic governance contain real teeth and don't avoid the crucial issue of compliance.""Much of the package has been agreed with Council but this final element is vital to put behind us the demons that led us into the present financial crisis, namely the ability of Member States to avoid pointing the finger of responsibility at each other when they are in breach of the commonly agreed criteria to maintain financial stability."

Note to editors:
The reversed QMV procedure would be based on a recommendation from the European Commission which Council could only overturn by a qualified majority, as opposed to requiring QMV to initiate the sanctions procedure.  The idea was first raised by Olli Rehn in September last year to introduce more automaticity to the process and avoid lobbying from Governments seeking to escape sanctions for breaching the rules of the Pact.