EU fixes deadlines for 14 deficit busters

BRUSSELS – Budget overspending and consequent national debt, already a severe problem for many countries before the financial crisis, are now turning into a critical dilemma for some nations, notably Greece, as they recover from the slump with deficits three times the required limit.

Austria, Belgium, the Czech Republic, Germany, Italy, the Netherlands, Portugal, Slovakia and Slovenia all saw excessive deficit procedures formally opened at talks in Brussels otherwise focused on agreeing new pan-European financial oversight arrangements.

Revised recommendations for Britain, France, Ireland and Spain were also agreed, while Greece was again reprimanded for failing to take adequate "corrective measures" to-date.

Ireland, France and Spain have been subject to the excessive deficit procedure since April 2009 and Britain since July 2008.

Belgium and Italy were given until 2012 to reduce their deficits below the three percent of gross domestic product laid down by EU rules.

Austria, the Czech Republic, France, Germany, the Netherlands, Portugal, Slovakia, Slovenia and Spain were each given until 2013.

Ireland has until 2014 and Britain until the 2014-15 financial year, the council said, adopting adjusted European Commission recommendations.

The deficit action is seen as the cornerstone of broader exit strategies from swollen economic pump-priming by governments over the past two years in efforts that staved off a prolonged depression.

As Europe emerged from recession, the ministers agreed on the timetable after figures issued last month showing that eurozone public deficits were set to triple this year to 6.4 percent of GDP and almost 7.0 percent in 2010.

Only seven EU members — Bulgaria, Cyprus, Denmark, Estonia, Finland, Luxembourg and Sweden — have respected the three percent limit.

Greece’s public deficit is expected to hit 12.7 percent of output this year, with Athens having outlined plans to reduce it to 9.1 percent next year.

Member states have formally agreed to start beating a retreat on unsustainable housekeeping by 2011 at the latest, ongoing recovery permitting.

AFP/Expatica