Friday, February 28, 2014

Berlin attacks EU’s easing of austerity demands

by Peter Spiegel

Financial Times

February 28, 2014

The German and Finnish finance ministries have issued a stinging rebuke of Brussels’ attempt to ease austerity demands on struggling eurozone countries, saying such flexibility improperly provided France and Spain with additional time to cut their budgets to meet EU deficit limits.

The rebuke, in an eight-page memo obtained by the Financial Times, accuses the European Commission of using “a somewhat arbitrary approach” in granting the budget flexibility to Madrid and Paris, and suggests “a separate pair of eyes” is needed to ensure Brussels is properly applying the new budget rules.

“Since 2012, the commission has substantially changed the way it assesses whether a member state has taken ‘effective action’ to comply with [EU budget rules],” the memo states. “The recent methodological changes imply the risk of watering down the newly strengthened [rules] at its implementation stage.”

The memo on the budget rules, which were adopted three years ago at the height of the eurozone crisis, was distributed to all 28 EU national capitals last week and debated by finance ministry deputies in Brussels on Thursday.


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