Teller Report

Now you can see non-English news...

Praise for Germany: Eight countries with problems with the Euro-Stabi-Pact

2019-11-20T15:31:39.613Z

TIME ONLINE | News, backgrounds and debates



Brussels (dpa) - From the point of view of the EU Commission, a whole series of euro states could face considerable problems with their budgets in the coming year.

Eight states threatened to violate the provisions of the Euro Stability Pact, the Brussels authorities said. Especially in Italy, France, Spain and Belgium there is an increased risk for 2020.

There are also problems in Portugal, Slovenia, Finland and Slovakia. For Germany, however, there was a small praise in one thing for the first time in years.

The aim of the pact is to balance the budgets of the states with the single currency in order to ensure the security of the euro.

An annual new debt of a maximum of 3 percent and a total debt of 60 percent of the gross domestic product (GDP) are allowed. Moreover, the budget planning of the states provides for longer-term debt reduction targets.

In the case of persistent violations, the EU Commission can initiate criminal proceedings, at the end of which finance ministers can theoretically impose billions of euros in fines. This has never happened in practice.

During the euro financial crisis, the deficits and debt levels, especially since 2010 in the euro countries had risen extremely. Some countries, for example, have had considerable problems financing public institutions, while others - such as Greece - have even been facing state bankruptcy.

In recent years, the situation improved. As the last country, Spain was recently released from criminal proceedings in June for excessive new debt.

"These four countries have not used the auspicious economic times to put their finances in order," complained EU Financial Commissioner Valdis Dombrovskis with regard to Italy, Spain, France and Belgium. "That's worrisome."

The commission and the dissolved coalition of populist five-star movement and right-wing lega in Rome were in trouble last year due to excessive spending by the heavily indebted country.

For the new center-left government of five-star and social democratic PD, the budget is now a first test of European political hardship. In France, President Emmanuel Macron had tried during the "Yellow West" protests to smooth the billows with billions of tax cuts.

The eurozone has seen significant economic recovery and growth in recent years. However, due to the ongoing trade disputes - especially between the US and China -, a paralyzing global economy and high uncertainty for companies due to the Brexit boom in the UK, the forecasts have recently been much gloomier again.

Overall, there is a split picture in the eurozone between states with high levels of debt and countries that have and should have financial leeway, the commission said.

In this context, there was praise for the planned overspending of the grand coalition in Berlin. "It is reassuring that eurozone countries like Germany and the Netherlands are using their fiscal space to support investment," said Dombrovskis. "There is room for them to do more."

Over the past few years, the EU Commission has repeatedly called for increased investment in view of significant surpluses from Germany in order to boost economic growth in the country and throughout the eurozone. The federal government had recently agreed on expenditures of around 362 billion euros for 2020 - almost six billion more than this year. For the seventh time in a row, however, she does not want to make new debts.

Budget drafts of the euro states

Overview of the EU Commission on the Euro Stability Pact

Medium-term budgetary targets

Methods of household surveillance in detail

Commission assessment of the German draft budget

EU Commission on the Italian draft budget

Source: zeit

You may like

Business 2019-08-26T08:56:13.272Z

Trends 24h

News/Politics 2019-12-13T14:07:19.261Z

Latest

news 2019/12/14    

© Communities 2019 - Privacy