EU to enshrine principles of broken budget pact

A dispute over the Stability and Growth Pact won't stop European Union leaders enshrining the broad outlines of freshly flouted…

A dispute over the Stability and Growth Pact won't stop European Union leaders enshrining the broad outlines of freshly flouted budget rules in a constitution for the enlarged bloc at this week's summit, officials say.

EU finance ministers last month suspended disciplinary steps they should have taken against Germany and France for breaking the pact's deficit limits in what the European Commission called one of the most serious institutional crises of recent years.

The decision piled pressure on leaders to come up with new budget rules and improve economic governance to ensure EU states follow agreed policy guidelines and make peers do the same.

The earliest opportunity to discuss the issue comes at a Brussels summit from Friday, but diplomats say the leaders will be too busy working out the EU's first constitution, key to how the bloc functions after its eastwards expansion next year.

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They are expected to do little more than paper over their differences and give the Commission the green light to work on proposals for a better model for economic governance.

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