France, Italy get last chance to fix budgets

France, Italy get last chance to fix budgets

Friday, November 28, 2014 5:37 pm

The EU on Friday gave France, Italy and Belgium an extra three months until March to fix their bloated budgets, but warned it would still enforce humiliating sanctions if they fail to curb spending.

The three countries were singled out by the European Commission, the EU’s executive branch, as it unveiled a tough assessment of eurozone budgets under new powers granted during the debt crisis.

But instead of immediately imposing penalties, Brussels gave them extra time to implement tough reforms, delaying a harsh verdict on national overspending amid global calls for Europe to ease up on austerity.

“The Commission will not hesitate to take its responsibilities” if they fail to take steps by March, Economic Affairs Commissioner Pierre Moscovici said as he announced the assessments.

France in particular had made “limited progress”, the commission said, referring to the fact that Paris is set for a deficit of 4.3 percent of GDP in 2015, way above the EU’s 3.0 percent ceiling.

Four other countries — Spain, Malta, Austria and Portugal — were also way off meeting the rules, the commission said.

Last month, France and Italy barely avoided having their budgets sent back for serious breaches in what would have been a major blow to the eurozone’s second and third biggest economies.

– ‘A clear calendar’ –

New European Commission chief Jean-Claude Juncker explained the decision to extend the deadline on the grounds that the countries concerned needed more time to fix their budgets.

“I made a choice not to sanction because that would have been easy,” Juncker told journalists from a group of European newspapers.

But he insisted that the Commission remained tough on budget overspending and the need for reform.

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