News
BackOn Wednesday, the European Commission took the first steps to open deficit proceedings against Spain, France, Greece, Malta, Ireland and Latvia. Last year, these Member States ran up budget deficits between 3.2 and 6.3 percent.
Based on the Stability and Convergence Programmes submitted by the Member States, the EU Commission evaluates whether the budget deficit rule (less than 3 % of GDP) has been adhered to. The programmes of 17 Member States were already reviewed, the remaining, among them Austria, will follow in April. In the next 15 days the Economic and Finance Committee has to publish its statement on the report of the EU Commission. Afterwards, the EU Commission will decide whether formal proceedings will be continued.
The Spanish Commissioner Joaquín Almunia, however, points out that in times of recession the stability pact is not about sanctions. It should rather be applied in a more flexible and intelligent manner to counteract the financial and economic crisis. The report of the Commission takes into account that a part of the budget deficits run up by Spain and France are the results of significant economic stimulus packages, which were decided within the framework of the European Economic Support Programme. Hence, Almunia only requests consolidation efforts by France and Spain to be started in 2010. In contrast, he demands immediate action by the Greek government and to accelerate consolidations as Greece until now would not show negative GDP growth. Due to extreme market pressure, he also advises Ireland to be more ambitious in stepping up its consolidation measures in 2009.
For further information:
Press release of the European Commission on the evaluation of the Stability and Convergence Programmes
The Spanish Commissioner Joaquín Almunia, however, points out that in times of recession the stability pact is not about sanctions. It should rather be applied in a more flexible and intelligent manner to counteract the financial and economic crisis. The report of the Commission takes into account that a part of the budget deficits run up by Spain and France are the results of significant economic stimulus packages, which were decided within the framework of the European Economic Support Programme. Hence, Almunia only requests consolidation efforts by France and Spain to be started in 2010. In contrast, he demands immediate action by the Greek government and to accelerate consolidations as Greece until now would not show negative GDP growth. Due to extreme market pressure, he also advises Ireland to be more ambitious in stepping up its consolidation measures in 2009.
For further information:
Press release of the European Commission on the evaluation of the Stability and Convergence Programmes