Friday

19th Apr 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 18 year's of archives. 30 days 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

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Latest News

  1. Romania drafts EU code on NGO migrant rescues
  2. Bulgaria, Hungary, and Malta shamed on press unfreedom
  3. EU drafts $20bn US sanctions list in aviation dispute
  4. Brunei defends stoning to death of gay men in EU letter
  5. US Democrats side with Ireland on Brexit
  6. Wifi or 5G to connect EU cars? MEPs weigh in
  7. How Brexit may harm the new EU parliament
  8. EU parliament backs whistleblower law

Join EUobserver

Support quality EU news

Join us