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| European Union Gives Belgium, France and Italy Time to Comply on Budget Rules | European Union Gives Belgium, France and Italy Time to Comply on Budget Rules |
| (about 1 hour later) | |
| BRUSSELS — The European Union authorities on Friday gave Belgium, France and Italy three more months to bring their budgets in line with legal requirements. | BRUSSELS — The European Union authorities on Friday gave Belgium, France and Italy three more months to bring their budgets in line with legal requirements. |
| The decision is a sign that the new European Commission, the bloc’s executive arm, under Jean-Claude Juncker will be sensitive to calls to ease up on austerity in Europe — particularly in the eurozone, where growth has sputtered and unemployment remains stubbornly high. | The decision is a sign that the new European Commission, the bloc’s executive arm, under Jean-Claude Juncker will be sensitive to calls to ease up on austerity in Europe — particularly in the eurozone, where growth has sputtered and unemployment remains stubbornly high. |
| “We will decide in early March whether any further steps are necessary under the Stability and Growth Pact,” said Pierre Moscovici, the European commissioner for economic affairs, referring to the bloc’s fiscal rule book. “By then, we will have a clearer picture of whether governments are delivering on their reform commitments.” | “We will decide in early March whether any further steps are necessary under the Stability and Growth Pact,” said Pierre Moscovici, the European commissioner for economic affairs, referring to the bloc’s fiscal rule book. “By then, we will have a clearer picture of whether governments are delivering on their reform commitments.” |
| In an accompanying statement, the commission said that Belgium, France and Italy were at risk of running afoul of fiscal rules. But the authorities in all three countries had “committed at the highest level of government” to put in place by early 2015 overhauls that would eventually help shore up their public finances, it said. | In an accompanying statement, the commission said that Belgium, France and Italy were at risk of running afoul of fiscal rules. But the authorities in all three countries had “committed at the highest level of government” to put in place by early 2015 overhauls that would eventually help shore up their public finances, it said. |
| The verdict for France could have been far more severe. The country has repeatedly missed the bloc’s requirement that budget deficits not exceed 3 percent of gross domestic product, and it is on course for another violation next year, when it expects the deficit to be above 4 percent of G.D.P. The French government has warned that it is unlikely to meet the deficit requirement before 2017. | The verdict for France could have been far more severe. The country has repeatedly missed the bloc’s requirement that budget deficits not exceed 3 percent of gross domestic product, and it is on course for another violation next year, when it expects the deficit to be above 4 percent of G.D.P. The French government has warned that it is unlikely to meet the deficit requirement before 2017. |
| That budgetary record could have led the commission to recommend penalizing France under rules that were toughened after the financial crisis in Europe threatened the euro. | That budgetary record could have led the commission to recommend penalizing France under rules that were toughened after the financial crisis in Europe threatened the euro. |
| Such a recommendation would have been a clear demonstration that Brussels is determined to enforce European Union fiscal rules with more determination than in the past. A more muscular approach would most likely have had the support of those members of the commission who regard France as a laggard that failed to push through the kinds of overhauls introduced in other countries, and who favor German-style budget rigor. | Such a recommendation would have been a clear demonstration that Brussels is determined to enforce European Union fiscal rules with more determination than in the past. A more muscular approach would most likely have had the support of those members of the commission who regard France as a laggard that failed to push through the kinds of overhauls introduced in other countries, and who favor German-style budget rigor. |
| But doing so could have led to an embarrassing political battle at the start of Mr. Juncker’s term. It also could have further damaged the government of President François Hollande of France and given more traction to the far-right National Front party, which is fiercely critical of the European Union. | But doing so could have led to an embarrassing political battle at the start of Mr. Juncker’s term. It also could have further damaged the government of President François Hollande of France and given more traction to the far-right National Front party, which is fiercely critical of the European Union. |
| While the commission chided France for having “not taken effective action for 2014 at this stage,” Mr. Hollande now has more time to put in place the kinds of changes that could eventually help steer France back into conformity with European regulations. | While the commission chided France for having “not taken effective action for 2014 at this stage,” Mr. Hollande now has more time to put in place the kinds of changes that could eventually help steer France back into conformity with European regulations. |
| The commission could still issue a recommendation to fine France 0.2 percent of its G.D.P. as soon as next spring, European officials suggested on Friday. The commission was keeping “all options” open for dealing with rule breakers, said Valdis Dombrovskis, a vice president at the European Commission who helps assess annual budgets to see if they are in compliance. | |
| Italy is already broadly in line with the bloc’s deficit rules, but it has a national debt that is far above the European Union target of 60 percent of G.D.P. It could still be put into a special procedure that could lead to fines. | Italy is already broadly in line with the bloc’s deficit rules, but it has a national debt that is far above the European Union target of 60 percent of G.D.P. It could still be put into a special procedure that could lead to fines. |
| The commission was also less harsh in its judgment of the Italian government of Prime Minister Matteo Renzi. | The commission was also less harsh in its judgment of the Italian government of Prime Minister Matteo Renzi. |
| Italy “has made some progress” but needs to ensure it is “keeping current primary expenditure under strict control while increasing the overall efficiency of public spending,” the commission said. In addition, “planned privatizations” would help put Italy’s debt “on a declining path consistent” with European rules. | Italy “has made some progress” but needs to ensure it is “keeping current primary expenditure under strict control while increasing the overall efficiency of public spending,” the commission said. In addition, “planned privatizations” would help put Italy’s debt “on a declining path consistent” with European rules. |
| In the case of Belgium, the commission called on the government of Prime Minister Charles Michel to specify the structural overhauls it plans to put in place before the country faces its next serious examination by the European authorities, in March 2015. | In the case of Belgium, the commission called on the government of Prime Minister Charles Michel to specify the structural overhauls it plans to put in place before the country faces its next serious examination by the European authorities, in March 2015. |