Tax & Spend
Germany Gets Tough on EU Debt Rules, Warns Markets Will Judge Harshly
- Lindner says 3% deficits must be limit, not a target
- Bundesbank’s Nagel says a bad deal would send bad signal
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German officials toughened their stance as negotiations over European debt and deficit rules enter the final strait, warning that a toothless agreement would be judged harshly by bond investors.
Finance Minister Christian Lindner said new regulation currently under negotiation must not cast doubt on whether euro-area economies have sustainable debts. Deficit reduction plans should target budget gaps well below the threshold of 3% of economic output, rather aiming at that as an endpoint.