Tuesday

16th Jan 2018

EU clears eurozone budgets after French, Italian tweaks

  • Green light for the eurozone budgets (Photo: Michal Hrabovec)

In its last major political act before it steps down at the end of the week, the current European Commission on Tuesday (28 October) gave the provisional all-clear to each of the 18 eurozone budgets.

"I cannot immediately identify cases of 'particularly serious non-compliance' which would oblige us to consider a negative opinion at this stage in the process," said EU economic affairs commission Jyrki Kaitanen.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The statement came after Italy and France were told that their original budgets fell short of what Brussels expected and would breach euro rules.

France's problem was its deficit - the difference between government income and spending - while Italy's was both its structural deficit and large debt pile.

Katainen laid out the complaints in letters just days after the budgets were submitted, raising much speculation about whether Paris and Rome - after some bellicose statements - would defy the commission.

But on Monday French finance minister Michael Sapin announced that he would be able to shave a further €3.6 billion off the deficit - although critics noted that no new reforms are being undertaken - while Italy said it would reduce its structural deficit more than originally promised ( by 0.3% of GDP in 2015, instead of 0.1%).

Rome also promised to do more about its debt - which is to be 133.4% of GDP in 2015.

Katainen praised the at-risk states for responding "constructively" to the commission's "concerns", with Austria, Malta and Slovenia also on Brussels' radar.

"Detailed assessment" of the draft budgets will continue before the commission adopts its formal opinion on them in November.

The review of draft budgets concerns all euro states, with the commission having won major new powers over recent years in a bid to prevent a financial crisis from re-occurring.

While member states - now in their second year of being tested - agreed to the changes there is an underlying tension about the commission being able to reject national spending plans.

The commission had to be seen to be taking a tough line with large member states France and Italy after smaller states such as Greece, Portugal, and Ireland underwent harsh austerity measures to bring them back in line with euro rules.

The green light means that the incoming commission of Jean-Claude Juncker, which formally takes office on Saturday (1 November), can begin with a clean political slate.

EU still undecided on France deficit

Hawks and doves within the EU commission and member states continue to disagree on how to deal with France's budget deficit, seen as a credibility test for the EU.

German coalition deal aims for 'Macron-lite' EU renewal

Merkel and Schulz clear the first hurdle of coalition talks, but the SPD's full membership backing is still needed. The likely coalition parties express support for Macron's eurozone reform ideas, but remain cautious.

Stakeholders' Highlights

  1. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  2. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  3. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  4. ACCAWelcomes the Start of the New Bulgarian Presidency
  5. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit
  6. EU2017EEVAT on Electronic Commerce: New Rules Adopted
  7. European Jewish CongressChair of EU Parliament Working Group on Antisemitism Condemns Wave of Attacks
  8. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  9. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  10. Plastics Recyclers Europe65% Plastics Recycling Rate Attainable by 2025 New Study Shows
  11. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  12. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology

Latest News

  1. Post-Brexit trade roll-over not automatic, EU paper says
  2. Oettinger pushes plastic tax but colleagues express doubts
  3. MEPs target exports of cyber surveillance tech
  4. Kosovo killing halts EU talks in Brussels
  5. ECB withheld information on 'flawed' bank supervision
  6. Fewer MEPs than visitors turn up for Estonian PM
  7. EU names China and Russia as top hackers
  8. Ten Commandments to overcome the EU's many crises