EU monetary affairs commissioner Joaquin Almunia says he is 'cautiously optimistic' that an agreement can be reached on reforming the EU's budget rules in time for a March summit.
'There can be agreement in March on reforming the pact,' Almunia told the economic affairs committee of the European Parliament, referring to the Stability and Growth Pact, which enshrines the euro zone's budgetary rules.
Almunia added that EU governments must agree reforms which struck a balance between budgetary policy and monetary policy.
The budgetary rules have been in tatters since France and Germany were let off the hook in 2003 despite repeatedly breaching the pact's ceiling on public deficits of 3% of gross domestic product.
The current Luxembourg presidency of the EU has said it wants to agree on reforms to the pact in time for an EU summit on March 22-23, which is charged with agreeing an overhaul of Europe's economy.
At a meeting of EU finance ministers on Tuesday, some members attacked German calls for a radical dilution of the euro zone's budget rules. Writing in the Financial Times on Monday, Chancellor Gerhard Schroeder called for substantial exemptions to the pact and said the European Commission's oversight of EU nations' economic policies should be sharply curtailed.
