The new European commission has shied from penalising eurozone countries, notably France and Italy, for being in breach of the single currency rulebook, and has given Paris and Rome until next spring to deliver on their pledges of sweeping changes to their labour markets and other structural reforms.
“As a new commission, we’re not seeing it as a priority to punish countries,” said Valdis Dombrovskis of Latvia, it’s new vice-president in charge of the euro.
Armed with new powers to scrutinise eurozone draft budgets in advance, dictate changes and punish recalcitrants, the commission said seven of 16 countries being assessed were at risk of breaking the stability and growth pact.
Of those, France, Italy and Belgium were the most serious sinners, France because of its persistent inability to get its budget deficit to within 3% of GDP; Italy and Belgium because of soaring public debt levels well beyond the 60% of GDP limit.
All three countries have written to Brussels promising to do more to comply with the rules. Less than a month into the tenure of the five-year commission under Jean-Claude Juncker, Brussels decided to give the three countries the benefit of the doubt.
via The Guardian