Euro constraints set to be loosened

THE European Commission yesterday proposed relaxing the budget-deficit constraints for eurozone countries.

The move follows pressure from Germany and France to scale back the threat of fines for rulebreakers and shift the focus to promoting economic growth.

Monetary Affairs Commissioner Joaquin Almunia said governments should get extra time to cut deficits as long as they have low debt or enact “structural reforms” such as selling state assets, fixing pension systems and investing in innovation.