This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2013/11/16/business/international/in-first-economic-review-italy-and-spain-get-warnings.html

The article has changed 6 times. There is an RSS feed of changes available.

Version 0 Version 1
In First Economic Review, Italy and Spain Get Warnings In First Economic Review, Italy and Spain Get Warnings
(about 2 hours later)
BRUSSELS — The top European economics official warned Italy and Spain on Friday that they risked missing important debt and deficit targets in the first review ever of national budget plans for 13 countries in the euro zone. BRUSSELS — The top European economics official warned Italy and Spain on Friday that they risked missing important debt and deficit targets in what was the first review of national budget plans for 13 countries in the euro zone.
The announcement, by Olli Rehn, the European Union’s commissioner for economics and monetary policy, is aimed at keeping tighter reins on national finances to stave off the kind of overspending that fed a crisis that nearly destroyed the euro.The announcement, by Olli Rehn, the European Union’s commissioner for economics and monetary policy, is aimed at keeping tighter reins on national finances to stave off the kind of overspending that fed a crisis that nearly destroyed the euro.
The reviews are a new attempt by the European Commission, executive arm of the European Union, to enforce rules on deficits that were flouted during the past decade by major states including Germany. That was widely seen as setting a bad example to countries like Greece with far more vulnerable economies. The reviews are a new attempt by the European Commission, the executive arm of the European Union, to enforce rules on deficits that were flouted during the past decade by major states including Germany. That was widely seen as setting a bad example to countries like Greece with far more vulnerable economies.
“We have reached a turning point on the road to economic recovery, and today we reach a milestone in the implementation of Europe’s strengthened economic governance,” Mr. Rehn said in a statement. “Member states have given the commission the responsibility to issue these opinions, and I trust that they will thus be taken on board by national decision-makers.”“We have reached a turning point on the road to economic recovery, and today we reach a milestone in the implementation of Europe’s strengthened economic governance,” Mr. Rehn said in a statement. “Member states have given the commission the responsibility to issue these opinions, and I trust that they will thus be taken on board by national decision-makers.”
The commission judged that the Italian draft budget “demonstrates limited progress” in meeting its earlier recommendations, and it warned that Italy might not hit its benchmark for reducing debt next year. The commission also ruled out giving Italy some extra leeway, because it “would not make the minimum structural adjustment” related to other economic indicators.The commission judged that the Italian draft budget “demonstrates limited progress” in meeting its earlier recommendations, and it warned that Italy might not hit its benchmark for reducing debt next year. The commission also ruled out giving Italy some extra leeway, because it “would not make the minimum structural adjustment” related to other economic indicators.
In the case of Spain, the commission said its draft budget for 2014 was “at risk of noncompliance” because “the headline deficit target may be missed and the recommended improvement in the structural balance is currently not expected to be delivered.”In the case of Spain, the commission said its draft budget for 2014 was “at risk of noncompliance” because “the headline deficit target may be missed and the recommended improvement in the structural balance is currently not expected to be delivered.”
The French plan was “compliant with the rules of the Stability and Growth Pact, albeit with no margin,” the commission said. The Netherlands received a similar warning.The French plan was “compliant with the rules of the Stability and Growth Pact, albeit with no margin,” the commission said. The Netherlands received a similar warning.
Even so, the commission did not invoke its powers to require Italy, Spain or any other country to revise their budget plans.Even so, the commission did not invoke its powers to require Italy, Spain or any other country to revise their budget plans.
Under a separate procedure, the commission told Belgium, Spain, France, Malta, the Netherlands, Poland and Slovenia to correct excessive deficits.Under a separate procedure, the commission told Belgium, Spain, France, Malta, the Netherlands, Poland and Slovenia to correct excessive deficits.
The powers that the European Commission now wields over national budgets is significant. Member states must send their draft budget plans to Brussels at the same time they send them to national parliaments. This year that deadline was Oct. 15. The power that the European Commission now wields over national budgets is significant. Member states must send their draft budget plans to Brussels at the same time they send them to national parliaments. This year that deadline was Oct. 15.
But the verdicts issued on Friday, and other opinions issued earlier this week by the authorities in Brussels, showed little appetite for a full-blown fight with member states. Instead, the political priority appears to be more to focus on good news at a time when there are fears that optimism about a recovery from the crisis might be premature. But the verdicts issued on Friday, and other opinions issued earlier this week by the authorities in Brussels, showed little appetite for a full-blown fight with member states. Instead, the political priority appears to be to put more to focus on good news at a time when there are fears that optimism about a recovery from the crisis may be premature.
On Wednesday, Mr. Rehn warned 16 member countries to address problems with their economies. Germany’s trade surplus and France’s public spending were singled out as problem areas. In theory, countries that do not meet their goals could eventually be fined. But in practice, in that case, the commission has already decided to shy away from full-blown confrontations with member states by making the exercise more of an advisory one.On Wednesday, Mr. Rehn warned 16 member countries to address problems with their economies. Germany’s trade surplus and France’s public spending were singled out as problem areas. In theory, countries that do not meet their goals could eventually be fined. But in practice, in that case, the commission has already decided to shy away from full-blown confrontations with member states by making the exercise more of an advisory one.