EU Countries Fall Foul of Deficit LimitsBy
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 (June 15), 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.
"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.