German finance minister against relaxing EU deficit rules

9th June 2009, Comments 0 comments

Last week, French Finance Minister Christine Lagarde said in Berlin that the European Union should consider "special treatment" for overspending related to the crisis that boosts deficits and debts.

Luxembourg -- German Finance Minister Peer Steinbrueck, a staunch defender of budgetary discipline, opposed on Monday a French proposal to relax European Union overspending rules in the face of the economic crisis.

"I would be very unhappy if the credibility of the Stability and Growth Pact were put into doubt," Steinbrueck told journalists as he arrived for a meeting of eurozone finance ministers in Luxembourg.

Last week, French Finance Minister Christine Lagarde said in Berlin that the European Union should consider "special treatment" for overspending related to the crisis that boosts deficits and debts.

Under the pact, EU countries must keep their public deficits under three percent of gross domestic product and debt under 60 percent of GDP.

But deficits have ballooned as the crisis reduces tax receipts and bumps up public spending as governments try to spend their way out of recession.

The European Commission forecasts that 13 out of the 16 countries which share the euro will break the three-percent rule in 2009 and 2010.

AFP/Expatica

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