Friday

29th Mar 2024

Tough times push three more outside EU budget rules

  • EU leaders will meet on Thursday to discuss an overhaul of the EU's budgetary rules (Photo: Fotolia)

The EU's economic malaise has forced a further three states to breach the bloc's budgetary limitations, just days before EU leaders are to meet in Brussels to discuss ways to overhaul the tattered rulebook.

Speaking from Strasbourg on Tuesday (15 June), European economy commissioner Olli Rehn announced that Cyprus, Denmark and his home country, Finland, are to join the growing pack of excessive deficit countries, as defined by the EU's Stability and Growth Pact.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"The entry into the excessive deficit procedure of these countries, which until recently had surpluses, shows the severity of the economic and financial crisis we have gone through," said Mr Rehn.

With even the formerly fiscally virtuous exceeding the EU's deficit and debt limits, three and 60 percent of GDP, respectively, the number of states still in compliance can now be counted on one hand.

Estonia, Luxembourg and Sweden are still considered to be budgetary angels by the commission, with Bulgaria technically still in compliance, but "likely to be put into the excessive deficit procedure once we can examine their data," said Mr Rehn.

Earlier this month, the EU executive body signaled that it plans to send a team of number crunchers to Sofia to scrutinise the country's budgetary data due to doubts over its veracity.

The commission recommends that member states set a deadline of 2011 for Finland to correct its budgetary position, 2012 for Cyprus and 2013 for Denmark - the timetable procedure being the main thrust of the excessive deficit procedure, which has never resulted in any member state getting a fine.

Progress by other states

The 12 EU states for whom timetables have already been set had their progress assessed, with Portugal and Spain uppermost in the minds of investors.

Both states have recently outlined additional measures in response to growing pressure from markets to decrease their budgetary deficits.

All capitals, including the southern two, were told actions to date were in accordance with the commission's previous recommendations, while further details on specific measures to reach deficit targets for 2011 were requested.

Barroso: EU budget rules are 'adaptable'

The EU commission has indicated it is prepared to give struggling countries some leeway to bring their debt back in line with EU rules, but continues to insist that member state cannot spend their way out of problems.

'Swiftly dial back' interest rates, ECB told

Italian central banker Piero Cipollone in his first monetary policy speech since joining the ECB's board in November, said that the bank should be ready to "swiftly dial back our restrictive monetary policy stance."

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us