Spanish Economy Minister Pedro Solbes played down the European Central Bank's criticism of a proposed revamping of European Union budget rules today.
European Union finance ministers reached a deal on Sunday to reform the Stability and Growth Pact underpinning the euro currency, prompting the euro zone's central bank to express serious concerns.
"In my opinion the objective remains the same, what there is is a certain change to the process of taking decisions," Mr Solbes, a former EU monetary affairs commissioner, said.
Spain has stuck to the rules of the Stability Pact, but close allies France and Germany have breached the 3 per cent budget deficit ceiling.
Under the proposed changes, which need approval from EU leaders, member states would be allowed to run up bigger shortfalls without facing automatic sanctions, and some countries such as Germany would be given flexibility in how deficits are calculated.
"It is true that the current pact has a much more automatic character . . . but the problem is that it hasn't been able to be applied. . . . It seems to me very much a value judgement . . . that this is going to bring with it a less or more rigid interpretation," Mr Solbes said.
ECB Governing Council member Mr Klaus Liebscher said yesterday the proposed changes were a "clear weakening of what is required for a healthy, sustainable fiscal policy for Europe".
Mr Solbes said it was understandable the central bank opposed the changes but said the preventative aspect of the pact - making sure countries make the most of good economic times to build up surpluses - would be improved by the proposal.
"The bank always has a tendency, logically, that things are changed as little as possible especially in issues of budget discipline.
"Let's see how it works, if it is practical, if we manage to advance in what we call the preventative part of the pact. . . . What has failed in the past has been that part, and that part is what has been greatly strengthened now," Mr Solbes said.