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Rep Power: 2  |  Italy and Greece to meet EU budget rules in 2007
Quote: Italy and Greece to meet EU budget rules in 2007, Germany and France nearly in the clear
LUXEMBOURG Italy and Greece seem on track to bring their budget deficits under the EU ceiling of 3 percent in 2007, EU Economic and Finance Commissioner Joaquin Almunia said.
Germany should be one step ahead of them early next year, as it is likely to be formally cleared of EU sanctions for coming within the budget limit, he said Tuesday. France, too, is "close to the end" of sanctions, he said.
This will finally see the two largest economies that use the euro stick to EU rules designed to keep the 12-nation euro-zone stable. All are required to keep their budget deficits below 3 percent of gross domestic product, a target many have found hard to meet.
Italy's slow growth in recent years has seen it struggle with the EU limit but the new government headed by Premier Romano Prodi is determined to bring Rome in line.
Almunia backed budget plans outlined Monday by Italian Finance Minister Tommaso Padoa-Schioppa that aim to raise €1.1 billion (US$1.4 billion).
"If this budget is implemented as the government intends to implement it, Italy can end 2007 with a budget (deficit) below 3 percent," he told reporters after a late-night meeting between the 12 euro-zone ministers.
Padoa-Schioppa aims to bring the deficit down to 2.8 percent next year from an expected 4.8 percent in 2006 and faces an uphill battle to get support from business and both parliamentary houses for harsh new measures that include a clampdown on tax evasion.
An EU court ruling on sales tax would increase the deficit to above 4 percent, Almunia said.
But, he warned Greece that it could not accept its revised gross domestic product figures that counts in the country's black economy until the EU's statistical agency checked Athens' bookkeeping.
Greece's budget deficit would slide under 3 percent this year, from last year's 4.5 percent, thanks to one-off measures, Almunia said — measures he does not favor because they do not make lasting changes to the country's economy.
And next year, Greece should make the target without resorting to these measures, he said.
Almunia praised both Germany and France, saying the latest figures — and a higher tax take as their economies pick up steam — had cut their deficits below earlier projections.
Germany is now predicting 2.6 percent this year and the final figure could be even better, he said.
The situation in France had improved this year, he said, and the deficit should stay under the EU limit in 2007. Paris had not used one-off measures and this was a "very positive element," he said, praising the government for using better "quality" ways of balancing its books.
The 12 ministers agreed not to change the inflation standards they use for accepting new members of the currency zone, said Luxembourg Prime Minister Jean-Claude Juncker who leads the regular talks.
Lithuania complained bitterly earlier this year when its high inflation narrowly saw it miss the limit and keep it out of the euro-zone in 2007.
The euro-zone will beef up its presence in international economic debates, Juncker said. Although some governments were reluctant to give up national seats to a single euro representative, all ministers agreed the Commission should be a permanent member at meetings of the G-20 meetings between leading world economies.
Euro countries with their own seat should also work together and present euro-zone views, he said.
Finance ministers from all 25 nations meet later Tuesday and are expected to formally approve German and British efforts to cut their deficits this year.
Despite EU criticism of Hungary's ballooning budget deficit — expected to hit 10.1 percent of gross domestic product, by far the EU's largest — ministers on Tuesday seem set to give Budapest until 2009, one more year, to cut that down to 3.2 percent.
Hungary saw violent protests last month after a recording of Prime Minister Ferenc Gyurcsany was made public, with him saying the government had lied "morning, evening and night" about the state of the economy to increase the chances of electoral victory and had failed to implement reforms.
EU finance ministers will also debate raising the budget for the European Investment Bank, aiming for agreement by the end of the year on where in the world they should lend money. The EIB lends money — usually to developing nations — at attractive rates and keeps reserve funds to help rebuild regions hit by disaster
LUXEMBOURG Italy and Greece seem on track to bring their budget deficits under the EU ceiling of 3 percent in 2007, EU Economic and Finance Commissioner Joaquin Almunia said.
Germany should be one step ahead of them early next year, as it is likely to be formally cleared of EU sanctions for coming within the budget limit, he said Tuesday. France, too, is "close to the end" of sanctions, he said.
This will finally see the two largest economies that use the euro stick to EU rules designed to keep the 12-nation euro-zone stable. All are required to keep their budget deficits below 3 percent of gross domestic product, a target many have found hard to meet.
Italy's slow growth in recent years has seen it struggle with the EU limit but the new government headed by Premier Romano Prodi is determined to bring Rome in line.
Almunia backed budget plans outlined Monday by Italian Finance Minister Tommaso Padoa-Schioppa that aim to raise €1.1 billion (US$1.4 billion).
"If this budget is implemented as the government intends to implement it, Italy can end 2007 with a budget (deficit) below 3 percent," he told reporters after a late-night meeting between the 12 euro-zone ministers.
Padoa-Schioppa aims to bring the deficit down to 2.8 percent next year from an expected 4.8 percent in 2006 and faces an uphill battle to get support from business and both parliamentary houses for harsh new measures that include a clampdown on tax evasion.
An EU court ruling on sales tax would increase the deficit to above 4 percent, Almunia said.
But, he warned Greece that it could not accept its revised gross domestic product figures that counts in the country's black economy until the EU's statistical agency checked Athens' bookkeeping.
Greece's budget deficit would slide under 3 percent this year, from last year's 4.5 percent, thanks to one-off measures, Almunia said — measures he does not favor because they do not make lasting changes to the country's economy.
And next year, Greece should make the target without resorting to these measures, he said.
Almunia praised both Germany and France, saying the latest figures — and a higher tax take as their economies pick up steam — had cut their deficits below earlier projections.
Germany is now predicting 2.6 percent this year and the final figure could be even better, he said.
The situation in France had improved this year, he said, and the deficit should stay under the EU limit in 2007. Paris had not used one-off measures and this was a "very positive element," he said, praising the government for using better "quality" ways of balancing its books.
The 12 ministers agreed not to change the inflation standards they use for accepting new members of the currency zone, said Luxembourg Prime Minister Jean-Claude Juncker who leads the regular talks.
Lithuania complained bitterly earlier this year when its high inflation narrowly saw it miss the limit and keep it out of the euro-zone in 2007.
The euro-zone will beef up its presence in international economic debates, Juncker said. Although some governments were reluctant to give up national seats to a single euro representative, all ministers agreed the Commission should be a permanent member at meetings of the G-20 meetings between leading world economies.
Euro countries with their own seat should also work together and present euro-zone views, he said.
Finance ministers from all 25 nations meet later Tuesday and are expected to formally approve German and British efforts to cut their deficits this year.
Despite EU criticism of Hungary's ballooning budget deficit — expected to hit 10.1 percent of gross domestic product, by far the EU's largest — ministers on Tuesday seem set to give Budapest until 2009, one more year, to cut that down to 3.2 percent.
Hungary saw violent protests last month after a recording of Prime Minister Ferenc Gyurcsany was made public, with him saying the government had lied "morning, evening and night" about the state of the economy to increase the chances of electoral victory and had failed to implement reforms.
EU finance ministers will also debate raising the budget for the European Investment Bank, aiming for agreement by the end of the year on where in the world they should lend money. The EIB lends money — usually to developing nations — at attractive rates and keeps reserve funds to help rebuild regions hit by disaster
LUXEMBOURG Italy and Greece seem on track to bring their budget deficits under the EU ceiling of 3 percent in 2007, EU Economic and Finance Commissioner Joaquin Almunia said.
Germany should be one step ahead of them early next year, as it is likely to be formally cleared of EU sanctions for coming within the budget limit, he said Tuesday. France, too, is "close to the end" of sanctions, he said.
This will finally see the two largest economies that use the euro stick to EU rules designed to keep the 12-nation euro-zone stable. All are required to keep their budget deficits below 3 percent of gross domestic product, a target many have found hard to meet.
Italy's slow growth in recent years has seen it struggle with the EU limit but the new government headed by Premier Romano Prodi is determined to bring Rome in line.
Almunia backed budget plans outlined Monday by Italian Finance Minister Tommaso Padoa-Schioppa that aim to raise €1.1 billion (US$1.4 billion).
"If this budget is implemented as the government intends to implement it, Italy can end 2007 with a budget (deficit) below 3 percent," he told reporters after a late-night meeting between the 12 euro-zone ministers.
Padoa-Schioppa aims to bring the deficit down to 2.8 percent next year from an expected 4.8 percent in 2006 and faces an uphill battle to get support from business and both parliamentary houses for harsh new measures that include a clampdown on tax evasion.
An EU court ruling on sales tax would increase the deficit to above 4 percent, Almunia said.
But, he warned Greece that it could not accept its revised gross domestic product figures that counts in the country's black economy until the EU's statistical agency checked Athens' bookkeeping.
Greece's budget deficit would slide under 3 percent this year, from last year's 4.5 percent, thanks to one-off measures, Almunia said — measures he does not favor because they do not make lasting changes to the country's economy.
And next year, Greece should make the target without resorting to these measures, he said.
Almunia praised both Germany and France, saying the latest figures — and a higher tax take as their economies pick up steam — had cut their deficits below earlier projections.
Germany is now predicting 2.6 percent this year and the final figure could be even better, he said.
The situation in France had improved this year, he said, and the deficit should stay under the EU limit in 2007. Paris had not used one-off measures and this was a "very positive element," he said, praising the government for using better "quality" ways of balancing its books.
The 12 ministers agreed not to change the inflation standards they use for accepting new members of the currency zone, said Luxembourg Prime Minister Jean-Claude Juncker who leads the regular talks.
Lithuania complained bitterly earlier this year when its high inflation narrowly saw it miss the limit and keep it out of the euro-zone in 2007.
The euro-zone will beef up its presence in international economic debates, Juncker said. Although some governments were reluctant to give up national seats to a single euro representative, all ministers agreed the Commission should be a permanent member at meetings of
| http://www.iht.com/articles/ap/2006/..._Ministers.php |
10th October 2006, 08:56
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