France, Italy and Belgium Likely to Break EU Budget Rules

The European Commission will tell France, Italy and Belgium on Friday their 2015 budgets risk breaking EU rules, but it will defer decisions on any action until early March.

At that point, France could face a multi-billion euro fine and Italy and Belgium be put on a disciplinary program.

Draft documents seen by Reuters show the three countries are part of a group also comprising Spain, Portugal, Austria, and Malta at risk of busting budget limits.

 
The Commission urges all of the countries not to break their budget limits, but picks out Rome, Paris and Brussels for a second review of compliance in March.

This gives the three more time to adjust policy before the EU executive must decide whether to fine France for missing targets or put Italy and Belgium under a disciplinary procedure because of their debt levels.

“Overall, the Commission is of the opinion that the Draft Budgetary Plan of France, which is currently under the corrective arm, is at risk of non-compliance with the provisions of the Stability and Growth Pact,” said a draft document, seen by Reuters.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza