Berlin lobbies against EU budget action

20th November 2003, Comments 0 comments

20 November 2003 , BERLIN - Berlin is desperately lobbying for and, in some cases, even buying the support of European Union member nations to set aside EU economic disciplinary sanctions against Germany, according to a newspaper report. The report in Thursday's editions of Die Welt newspaper quotes informed sources as saying German Finance Minister Hans Eichel has already lined up a majority of EU countries behind Germany. Most recently, he succeeded in getting the Spanish government to vote against the E

20 November 2003

BERLIN - Berlin is desperately lobbying for and, in some cases, even buying the support of European Union member nations to set aside EU economic disciplinary sanctions against Germany, according to a newspaper report.

The report in Thursday's editions of Die Welt newspaper quotes informed sources as saying German Finance Minister Hans Eichel has already lined up a majority of EU countries behind Germany.

Most recently, he succeeded in getting the Spanish government to vote against the EU Commission, said the Die Welt report.

Just three countries continue to support the EU Commission's hard-line on fiscal stringency, it was said. Hardliners Austria, Finland and the Netherlands are known to be adamant that a strict application of eurozone financial rules is needed to preserve the credibility of the stability pact.

Other countries, many of them dependent on French and German support in other areas, are less adamant about fiscal sanctions.

"Germany bought the support of several countries," the report in Die Welt said.

Eichel is confident he will have a majority when EU finance ministers meet in Brussels next week and are asked to endorse Commission action against Germany. Even without the German push, endorsement had not been expected at any rate.

But even if financial sanctions against Berlin are unlikely, the Commission move is a political embarrassment for Germany which helped write eurozone rules in 1997.

The report comes after the EU Commission decided to pursue disciplinary procedures against eurozone economic giant Germany for failing to keep its budget deficit under 3 percent of Gross Domestic Product (GDP).

The Commission - eurozone policeman as well as the executive arm of the European Union - will press ahead with action against Germany despite Berlin's repeated promises that it is striving to control spending, a Commission speaker told Deutsche Presse-Agentur dpa.

The move is intended to commit Germany to lowering its budget deficit to under the 3 percent level stipulated in the EU's Stability Pact.

The Commission demands an initial reduction of the structural budget deficit by 0.8 percent next year and a fall to below 3 percent by 2005. To achieve this, it has demanded that Berlin save EUR four billion in total in expenditure.

The benchmarks set by the commission exceed initial plans by Chancellor Gerhard Schroeder's government which had proposed an initial reduction target of 6 percent and refused demands for additional savings.

 Germany has been in violation of the eurozone stability pact for two successive years and is certain to do so again in 2004.

 The Commission is authorised to take disciplinary measures against countries which run up excessive budgetary deficits for three successive years.

 A Commission report published recently said the German budget deficit would stand at 4.2 percent in 2003, falling slightly to 3.9 percent in 2004 and 3.4 percent in 2005.

 

DPA
Subject: German news 



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