Brussels and ECB urged to act as eurozone inflation falls to 0.7 …
… while French, Spanish and Dutch draft plans barely make it, the European Commission said today.
If you want to know what losing national self determination feels like, you need look no further than the Brussels’ judgements on national budgets. Poland and Croatia face sanctions for running persistently high deficits.
According to some analysts, Poland’s misdeeds could hamper its entry to the euro
Anyway, the review marks the first time Brussels has enjoyed such gorgeous, unalloyed power to criticise the finance proposals of member states, at least those inside the eurozone.
Technically, the EU’s executive arm is doing no more than reviewing the main assumptions of draft national budgets to assess if they are in line with EU laws. This is before they are submitted to national parliaments.
However, the commission can demand a revised budget plan from a euro zone country if its draft clearly breaks EU rules,
There are 19 EU countries under investigation at the moment for breaking various rules, after Germany was added this week for running monster current account surpluses that Brussels believes could be as bad for the currency zone as large annual deficits.
Italy, the eurozone’s third biggest economy, wants some leeway because its public debt is rising rather than falling and it suffers chronically low growth.
“There is a risk that the draft budgetary plan for 2014 will not be compliant with the rules,” the commission said in a statement. “In particular, the debt reduction benchmark in 2014 is not respected,” it said.
The commission said that the eurozone’s second biggest economy France had taken the recommended steps to reduce its budget gap below 3 percent in 2013, and its 2014 draft budget is in line with EU budget rules, but with no margin for error, reported Reuters .
Also, France’s structural reform plans made only “limited progress”, the commission said.
Italy’s Prime Minister Enrico Letta (R) meets Pope Francis yesterday.
Letta wants Brussels to turn a blind eye to EU rule breaches in his latest budget plans Photograph: REUTERS