EU intends to set strict limit on large budget deficit

In his speech on May 21, the EU council president (Van Rompuy) stressed to enforce financial supervision, and essentially curb the expansion of debt crisis by means of a sound regulation.

He said that  a permanent management sector is needed, consisting  of  financial ministers of all members, in order to enforce strict discipline on financial budget and try to eliminate the big gap amid the member states in competition.  

He indicates that EU is too slow in response to the debt crisis and experience should be learnt from, when showing his firm confidence in controlling the crisis. “Hence, any violations of financial disciplines should be severely punished by various means, financially or non-financially.”  He says.

He asks for the advices from all the member states to be submitted the EU summit meeting on June 17 for approval, including the details on punishment. Stipulated by the EU, member country’s budget must be lower than 3 percent of its GDP with debt accumulations below 60 percent of GDP.

Other than the  financial disciplines, the most noted issue suggests whether EU would carry out the banning of naked short selling performance all over the European market, its said the relative regulations have been drafted. Early on 18, Germany has unilaterally prohibited naked short selling business on its stocks and bonds of its financial sectors.