Auteur: Richard Carter
EUOBSERVER / BRUSSELS - The European Commission today (7 April) issued sharp rebukes to six member states for breaching its economic rules.
Economics and monetary affairs commissioner Pedro Solbes announced that six member states - representing more than three quarters of total EU economic output - either currently have or risk having budget deficits over the maximum permitted level of three percent of gross domestic product (GDP).
France and Germany have already broken these rules for the past three years and whilst Mr Solbes praised Berlin for being "on the road" to compliance with the rules, he was more critical of France, saying, "there is still a risk that the French government might fail to achieve its consolidation commitments".
And Paris and Berlin were today joined in Brussels' bad books by the Netherlands, Italy, the UK and Greece.
Yellow card for Rome
Italy was issued with a "yellow card" for allowing their deficits to rise too quickly and Brussels said it hopes Rome will conduct an "immediate change in policy". The Italian government was also criticised for taking one-off measures to reduce its deficits and warned that it was running out of such measures.
Mr Solbes warned that Greece is approaching the limit and announced that a team from the EU's statistical arm, eurostat, would visit Athens to examine the exact situation.
However, he was softer on the UK and the Netherlands. London is expected to get its deficit back below the ceiling in the near future due to strong economic growth and The Hague was commended for taking steps to resolve the situation.
And on the positive side, Portugal - an earlier offender - was taken off the list, having taken drastic measures to creep back under the limit. "Portugal seems on the way out", said Mr Solbes.
Think of the children
The commissioner firmly emphasised the importance of controlling the deficits, saying, "member states should not run high deficits because somebody would have to pay them back later on".
"European governments should not accumulate high public debts because this is not fair for our children. It is as simple as that".
Different situations, different attitudes
The Commissioner noted that each country has a specific situation and is judged on a case-by-case basis. Wide differences in the attitudes of individual member states to following the rules have also emerged.
The greatest indifference to a rebuke from Brussels can be found in Rome, where Italian prime minister Silvio Berlusconi blames Commission President Romano Prodi for gaining domestic political capital from attacking Italy's economy.
In Athens, the Greek finance minister Giorgos Alogoskoufis blamed the previous government - which was recently ousted from power in a general election - for its budgetary problems.
Paris and Berlin have pledged publicly that they are committed to obeying the EU rules but the pair is widely blamed for destroying the credibility of the rules by persuading fellow member states to suspend the disciplinary procedure against them last November.
It is unlikely that the UK will be too concerned about the rebuke from Brussels. As a non-member of the euro, London does not have to comply with EU economic rules.
On the other hand, the Dutch finance minister Gerrit Zalm is the EU's biggest stickler for the rules. He said he expected to receive an early warning and has emphasised that he is taking action to change the situation.
But there is little doubt that the credibility of the euro is at stake when six member states - including the four biggest economies - pay little heed to the rules underpinning the currency.
Alluding to this, Mr Solbes said, "I also know that our currency is young and we have to stick to our principles in order to help it grow up".
This comment came in response to some member states who have called for the rules to be changed.
This was Mr Solbes' last press conference as economics commissioner. He now goes to Madrid to become finance minister of Spain, where he will inherit an economy with a healthy budgetary position.
The highpoint of his five years in Brussels was undoubtedly the successful introduction of the euro but he will also be remembered for the rows over the euro rules which have dogged the latter part of his term.