Polish PM Threatens 'No' Vote On EU Fiscal Compact

Polish Prime Minister Donald Tusk, British Prime Minister David Cameron, German Chancellor Angela Merkel, and EC President Herman Van Rompuy (left to right) will meet at the European Union summit in Brussels.

BRUSSELS -- Polish Prime Minister Donald Tusk has criticized the European Union's proposed new fiscal compact, suggesting he will not vote in favor of it at an EU summit getting under way on January 30.

Tusk, speaking in Brussels ahead of the summit, said decision-making responsibility in the pact was not spread evenly and that non-eurozone countries need a larger voice.

"Poland, as well as many other countries, is ready to take responsibility for the fiscal compact but under one condition: that these countries also will participate in the decision-making process of how this fiscal compact is executed," Tusk said.

Poland is not a member of the eurozone, but agreed at an EU summit in December, along with all other EU members except the United Kingdom, to consider supporting the pact.

At the summit, EU leaders will try to reach agreement on the fiscal compact, which includes budgetary reforms that would better define the content and enforcement of budgetary rules for countries within the eurozone.

Under the proposed pact, countries would commit to balanced budgets and to establish "automatic consequences" in case projected targets are not met by too great a margin.

The European Court of Justice would be given authority to verify implementation of the agreement.

The proposed deal also calls for at least two annual summits of eurozone states, with non-eurozone countries being invited to at least one such summit per year.

Tusk said Poland wanted assurances that it will be able to participate in all meetings at which decisions affecting Poland will be considered.

As European officials were arriving in Brussels, Belgium's three main labor unions launched a strike in an anti-austerity protest aimed at their own government and coinciding with the EU gathering. Transport and some other public services were reported as partially disrupted.

Financial 'Shock' Tax

Ahead of the summit, French President Nicolas Sarkozy announced plans to impose a new 0.1 percent tax on all financial transactions in France, beginning in August.

Sarkozy said he hoped to "create a shock" with the tax and inspire other European countries to follow, despite vocal opposition in some other EU countries -- most notably, the United Kingdom.

Speaking in a television interview broadcast on January 29 by six French channels, Sarkozy said the global financial crisis was beginning to calm down and that Europe was "no longer on the edge of an abyss."

He said all of Europe's efforts must now be "dedicated to the resolution of the economic crisis."

"With caution, I think we can say that the elements of financial stability in the world and in Europe have been laid down," Sarkozy said. "The economic crisis is still there, extremely profound. But as for the financial crisis at the beginning of 2012, the measures taken by France and Europe and the regulation measures taken by the G20 have allowed things to stabilize."

Meanwhile, the Greek debt crisis continues to be a contentious issue. On January 29, Greece's finance minister rejected a German proposal for the EU to take control over Greece's tax and spending decisions -- citing national sovereignty.

German Finance Minister Wolfgang Schaeuble responded by warning that the eurozone might refuse to give Greece a fresh bailout -- pushing the country into default -- unless the government in Athens can convince the rest of Europe that it is able to overhaul its state and economy.

Meanwhile, Spain's National Statistics Institute says the country’s economy shrank by 0.3 percent during the fourth quarter -- edging the country closer to a new recession.

The figure broke a run of seven quarters without economic contraction in Spain. A further slide this quarter in the eurozone's fourth-biggest economy would put Spain in its second recession in less than three years.

Authorities last week announced that Spain has a 22.8 percent unemployment rate -- the highest jobless rate in the eurozone and among the highest in the industrialized world.

With agency reports