EU forced to go soft on budget deficit breaches
Thursday 19 February 2009
Brussels is to take disciplinary|action against six European Union members for breaching the bloc’s maximum allowed budget deficit as they attempt to shore up their faltering economies. But it emerged last night that France, Ireland, Spain, Hungary, Malta and Latvia are likely to escape relatively unscathed, with the European Commission under heavy pressure not to slap the heavy penalties that breaking EU’s budget deficit rules would normally incur.
Joaquín Almunia, the European Commissioner for Economic and Monetary Affairs, yesterday insisted that it was essential to stick to the EU’s Stability and Growth Pact, which dictates that member states’ deficits must not exceed 3 per cent of gross domestic product, but subsequently promised to stretch existing rules as much as possible in light of the current “exceptional circumstances”.
Mr Almunia said: “The pact is not at all about sanctions during a recession, nobody is talking about sanctions – the Commission will use the full flexibility embedded in the revised pact when considering the next steps.”
The Commission is being forced to temper its calls for fiscal rectitude as it led calls for a Europe-wide stimulus package requiring member states to dig deep into their coffers last autumn.
Mr Almunia may also find it hard to follow through on his pledge to maintain the full credibility of the pact in order to avert “a disaster for Europe’s economies”, given that the six affected countries are likely to continue or exceed their budget deficits for 2008 over the coming year – and are likely to be joined by the majority of eurozone economies in doing so.
Ireland was the worst culprit in the “excessive deficit report”, with an estimated 6.3 per cent budget deficit last year that is set to deepen to 9.5 percent this year. France’s deficit, which only just broke through the 3 per cent barrier in 2008, is set to rise to 4.4 per cent this year.
“It would have been more straightforward for Mr Almunia just to|suspend the 3 per cent limit, which clearly has to happen now though who knows for how long,” said Daniel Gros, director of the Brussels-based Centre for European Policy Studies.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Ashya King missing: Police hunt five-year-old boy with brain tumour snatched from Southampton hospital by his parents
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Papua New Guinea Mount Tavurvur volcano eruption sees international flights diverted
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...