Nations’ spending plans criticised

The European Union has confronted the euro area’s biggest economies over their spending plans for next year as austerity demands restrain the bloc’s recovery from the longest recession in its history.

The EU said Germany has made no progress in following recommendations to spur domestic demand, that Spain’s budget risked missing deficit targets and that Italy’s 2014 plan was at risk of breaching debt-reduction rules.

The budget plans of euro-area countries “still do not pay sufficient attention” to fiscal consolidation, EU Economic and Monetary Affairs Commissioner Olli Rehn said. “Continued progress with sound public finances should be supported by growth-friendly structural measures.”