Thursday

12th Dec 2019

Brussels to let Paris and Berlin off euro rule hook

The European Commission will tomorrow (14 December) suspend its disciplinary procedure against France and Germany because it believes they have taken sufficient measures to reduce their budget deficit, EU sources have confirmed.

Economics and monetary affairs Commissioner Joaquin Almunia will tomorrow present a Commission report into the deficit situations of France and Germany and sources have confirmed that Brussels is satisfied that they will get their deficits below the maximum permitted limit of three percent in 2005.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

"There seems to be a real willingness to comply", said one source. "No further steps are necessary ... this is not a political decision and the Commission will continue to monitor the situation".

Paris and Berlin have repeatedly breached the EU's Stability and Growth Pact - the rules that underpin the euro - but both have announced concrete measures to improve the situation, satisfying the Commission that no further action against them is required.

France has been able to reduce its deficit mainly through higher growth levels, whereas Germany has been forced to take several additional measures. A plan to scrap a national holiday to reduce the deficit was hastily shelved.

Long saga

Tomorrow's announcement brings to an end a long and bitter power struggle between the European Commission and the euro zone's two biggest economies.

Last November, in an acrimonious meeting that went on until 4.30 in the morning, France and Germany persuaded fellow finance ministers to suspend the disciplinary procedure against them, prompting a furious Commission to take them to the European Court of Justice.

The Court ruled that the finance ministers' decision be annulled, forcing France and Germany to take action to avoid fines of potentially billions of euro.

However, the atmosphere has since changed considerably and a reform of the rules is underway, which will give member states more flexibility.

Glossary of key euro pact terms

The language surrounding the EU's Stability and Growth Pact can be highly complex for the uninitiated. Click here for an explanation of the key terms.

Fury and recrimination over euro rules

As more details emerged about the deal struck to save France and Germany from potential European Commission fines, ministers, commissioners, MEPs and spokespeople swiped at each other both in public and behind the scenes.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

EU agrees 2020 budget deal

EU governments and the parliament agreed in marathon talks ino next year's budget - which will boost spending on climate, border protection, and the European satellite system. It will also be a benchmark if there is no long-term budget deal.

News in Brief

  1. Czechs protest against PM Babis over EU subsidy 'fraud'
  2. EU disbursed €2.7bn for Turkey refugees
  3. UK ports set to host EU border checks for Northern Ireland
  4. EU puts tech giants in crosshairs
  5. Faroe Islands under pressure to chose Huawei
  6. Hungary asked to apologise after council leak
  7. MEPs: Finnish budget proposal 'impossible to implement'
  8. EP committee supports 'Future of EU Conference'

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Latest News

  1. Leaders to battle on climate target and money at summit
  2. Von der Leyen: 'Green Deal is our man-on-moon moment'
  3. North Atlantic mini states in geopolitical turbulence
  4. Survey marks EU optimism on eve of UK's Brexit election
  5. Six priorities for human rights
  6. European shipping's dirty secret
  7. Hungary quizzed over EU rules amid twitter row
  8. Spanish King meets party leaders to break deadlock

Join EUobserver

Support quality EU news

Join us