Updated: 02/21/2013 02:56 | By Agence France-Presse

EU nears national budget oversight

The EU moved closer Wednesday to centralised oversight on national budgets, negotiaters said, an increasingly sensitive topic as Brussels readies to issue new economic forecasts with France in the firing line over puny growth and a probable deficit overshoot.

Long-contested tweaks to a package of laws designed to harmonise economic governance especially across the eurozone met with a breakthrough, participants said.

The talks included European Parliament, the European Commission and the current Irish chair of the council of European Union governments.

The idea is that national spending decisions not only are proofed by Brussels before parliamentary approval is sought, but also that priority -- and leeway if excessive deficits return -- is given to spending towards growth and jobs, the new EU mantra amid dogged recession.

The deal has still to pass a full vote in the EU legislature, but talks co-sponsor, Portuguese Socialist MEP Elisa Ferreira, said that with austerity "not delivering ... we need to adapt the medicine."

She underlined: "We need to rebalance our short-term objectives to better address growth and the vicious spiral of high debt-financing interest rates.

"Countries now making superhuman sacrifices need to know that their efforts are recognised and will be rewarded."

EU economy and euro commissioner Olli Rehn, whose forecasts on Friday morning will mainly be watched for their likely effect on French leaders' promises to meet treaty-agreed deficit targets, also hailed the agreement.

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