Saturday

4th Feb 2023

Brussels to pursue Greece and Hungary for breaking euro rules

The European Commission is set to pursue disciplinary proceedings against Hungary and Greece for breaking the rules underpinning the euro, according to media reports.

The budget deficits of both these countries clearly surpasses the three percent limit set by the EU's Stability and Growth Pact and the Commission will rule today (22 December) that they have not taken sufficient measures to reduce them, according to AFP.

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However, Brussels is expected to suspend disciplinary procedures against Poland, the Czech Republic, Slovakia, Cyprus and Malta.

Greece's deficit has been over the EU's limit since 1997, it was revealed in November after a drastic revision of their statistics. It is expected to reach six percent this year, but Athens has pledged to scrape below the ceiling again in 2005.

The next stage of the procedure - if Greece fails in its commitments - is to threaten huge fines, which could run into billions of euro.

Brussels has recently suspended this disciplinary procedure against France and Germany, judging that the two heavyweights of the euro zone are on target to move under the three percent level in 2005.

The final decision on what to do with Greece and Hungary will be taken by EU finance ministers.

Meanwhile, Portugal's Prime Minister Pedro Santana Lopes, said that his government will take emergency measures to avoid breaking the Stability Pact after Brussels ruled a planned sale of government property invalid.

Portugal faces a "deep crisis" over its budget, said Mr Santana Lopes, according to the FT and needs to raise 750 million euro by 31 December to avoid the Commission's wrath.

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