Brussels gives green light to all draft budget plans in the euro area
Commission warns Italy and other seven Member States over spendingEuropost
The European Commission published on Wednesday its assessment of the draft budgetary plans of the euro area Member States, greenlighting - after all - the problematic budget plans of Italy and seven other countries. The Commission said it has found that no draft budgetary plan for 2020 shows particularly serious non-compliance with the requirements of the Stability and Growth Pact.
Plans of nine Member States (Germany, Ireland, Greece, Cyprus, Lithuania, Luxembourg, Malta, the Netherlands and Austria) are compliant with the pact. The plans of two Member States (Estonia and Latvia) are broadly compliant, while the plans of eight Member States (Italy, Belgium, Spain, France, Portugal, Slovenia, Slovakia and Finland) pose a risk of non-compliance with the Stability and Growth Pact next year. Still, since July this year and for the first time since 2002, no euro area Member State is under the Excessive Deficit Procedure, the Commission said.
“With mounting risks weighing on Europe's economic growth prospects, it is reassuring to see euro area countries like Germany and the Netherlands using fiscal space to support investment,” European Commission VP Valdis Dombrovskis pointed out. At the same time, he noted that Member States with very high levels of debt, such as Belgium, France, Italy and Spain, should take advantage of the lower interest expenditure to reduce their debt. And that should be their priority.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, also urged countries with high debt to pursue prudent fiscal policies, while encouraging those with fiscal space to invest further.
The Commission on Wednesday also made two recommendations to Hungary and Romania under the Significant Deviation Procedure, a tool which intends to send a warning in case of an important deviation from the requirements of the preventive arm of the Stability and Growth Pact.