by Calculated Risk on 5/12/2010 07:52:00 PM

From Stephen Castle at the NY Times: E.U. Plans Peer Review for Member States' Budgets

[T]he European Commission on Wednesday outlined ambitious proposals to give countries that use the euro a say over each other’s budget plans.
...
“Member states should have the courage to say whether they want an economic union because, if they don’t want that, it is better to forget monetary union altogether,” [European Commission president, José Manuel Barroso] said at a press conference in Brussels.

Among the ideas announced Wednesday was a plan to make the huge safety net for the euro that was decided on over the weekend a permanent crisis-resolution mechanism.

From the EU: Mastering economic interdependence: Commission proposes reinforced economic governance in the EU

I'm not sure how this will go over.

Meanwhile in Spain from the Financial Times: Tough new Spanish austerity measures

José Luis Rodríguez Zapatero, Spain’s prime minister ... announced a surprise 5 per cent cut in civil service pay to accelerate cuts to the budget deficit.
...
The measures should help bring the deficit down from 11.2 per cent of GDP in 2009 to just over 6 per cent in 2011.
excerpt with permission

The EU €750 billion announced on Sunday just buys time. As part of that agreement, both Portugal and Spain agreed to reduce their deficits.