Saturday

24th Aug 2019

EU ends long-running budget battle with France and Germany

The European Commission on Tuesday (14 December) said that "no further steps" are necessary against France and Germany for breaking the economic rules underpinning the euro.

Economics and monetary affairs commissioner Joaquin Almunia told reporters, "given the actions taken by France and Germany, it would appear that no further steps are required at this point".

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

France and Germany have for three years been in breach of the EU's "stability and growth pact", which forbids Member States to run a budget deficit above three percent of gross domestic product (GDP).

But Brussels is satisfied that both countries have made sufficient efforts to reduce their deficits to below the three percent level next year. The Commission believes that the German deficit will be 2.9 percent next year and exactly three percent in France.

However, Mr Almunia warned that both countries had taken "one-off" measures, rather than ongoing structural actions and said, "the budgetary situation remains vulnerable in the two countries". He added, "the Commission remains vigilant".

Despite this, the Commissioner confirmed that Paris and Berlin were "on track" to meet the EU's budgetary requirements.

Long and bitter struggle

The 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.

Brussels to let Paris and Berlin off euro rule hook

The European Commission is set to 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.

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.

Almunia: budget deal within months

The European Commission hopes to reach an agreement on reforming the euro stability and growth pact within the next few months.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

News in Brief

  1. Ocean Viking to disembark in Malta after ordeal
  2. Germany joins France in world outcry on Brazil fires
  3. British people lose faith in Brexit deal
  4. Brexit hardliners want further changes to EU deal
  5. German manufacturers confirm fear of recession
  6. Belgian socialists and liberals scrap over EU post
  7. Fall in EU migration leading to UK skills shortages
  8. Switzerland makes post-Brexit flight preparations

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. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Spain heading for yet another general election
  2. EU to discuss Brazil beef ban over Amazon fires
  3. 'Our house is burning,' Macron says on Amazon fires
  4. What happens when trafficking survivors get home
  5. EU states and Russia clash on truth of WW2 pact
  6. EU considers new rules on facial recognition
  7. EU to pledge Africa security funds at G7 summit
  8. Letter from the EESC on per diem article

Join EUobserver

Support quality EU news

Join us