New Europe — The European Commission’s intention to propose Greece’s exit from the Excessive Deficit Procedure “in the coming weeks,” announced the European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovisi on Wednesday.
The French Commissioner repeated that Greece has performed well and made great efforts, as the country’s budget deficit is not higher than 3%, as required by the bloc’s Stability and Growth pact and that the member state has exceeded the target of Primary surplus almost ten times within 2016.
In fact, in 2016 Greece managed to turn a budget surplus of 0.7% , just behind Germany’s 0.8%
However the Commissioner waited for the Eurogroup meeting outcome, and did not proceed to this proposal during May, as it was expected after the EU executive released its Spring economic package and its Country Specific Recommendations.
Moscovisi said that as the talks within the eurozone finance ministers meeting were positive for Greece, “there is no reason now to delay the decision to exit Greece from the excessive deficit procedure,” said , adding that the EU Commission will present his proposal “very soon, within a few weeks,” as we move closer to 10 July Eurogroup meeting.
Under EU rules, member states are not supposed to run annual deficits greater than 3% of their total economic output.
The Commission, which has the power to oversee eurozone countries’ draft budgets, said eight country members risked “non-compliance” in 2017.
Italy, Spain, Portugal, Belgium, Cyprus, Finland, Lithuania and Slovenia escaped with a warning when the EU Council gave them more time to conform to the rules and reduce their deficits.
Last year, Spain’s deficit was 5.1% of its gross domestic product (GDP), while Portugal’s stood at 4.4%.
Although all EU countries are required to run budget deficits below 3% of GDP, only the 19 countries that use the euro as a currency can be fined.
France has also failed to meet the EU’s Stability and Growth Pact rules on deficit limits for the last 10 years. In 2016 it run a deficit of 3.4% but the European Commission expects France’s deficit to be 2.9 percent this year, before going back up to 3.1 percent in 2018.
President Macron has pledged to cut public spending by 60 billion euros over five years by, among other things, reducing the number of civil servants by 120,000.
