EU passes states’ budgets

The European Union said no nation has broken EU budget rules by a big enough margin to warrant immediate action, a move that gives France and Italy more time to win approval for their draft spending plans.

“After taking into account all of the further information and improvements communicated to us in recent days, I cannot immediately identify cases of particularly serious non-compliance which would oblige us to consider a negative opinion at this stage in the process,” European Commission vice president Jyrki Katainen said.

The commission had previously welcomed last-ditch attempts from eurozone nations to meet the bloc’s requirements, without signalling whether they would succeed. Letters that the French and Italian governments sent to the commission detailing additional action are “useful and constructive contributions,” commission spokesman Simon O’Connor told reporters in Brussels yesterday. “We are still analysing the information.”

The EU will release its budget opinions next month, ahead of a November 30 deadline. Tougher budget rules adopted after the financial crisis require earlier rulings if countries are particularly out of step with the currency union’s requirements.

France and Italy, the eurozone’s second- and third-largest economies, were among five countries the commission last week asked for more information about 2015 spending plans. The commission has the authority to reject a national government’s budget and demand revisions if it considers there is a significant risk of breaching debt and deficit rules, a power it acquired last year.

“Over the past two weeks, the commission has carried out consultations with certain member states to request further information or to highlight some initial concerns,” Mr Katainen said. “I want to welcome the fact that these member states have responded constructively to our concerns.”

France has made “significant improvement” to its 2015 budget and Italy’s reform plan is “ambitious” and “absolutely necessary,” Katainen told reporters in Brussels today.

France will reduce its deficit by an additional €3.6bn, finance minister Michel Sapin said on Monday. The government will achieve an improvement in its structural deficit of 0.5% of gross domestic product in 2015, partly by cracking down more on tax fraud, Mr Sapin told the commission in a letter.

Bloomberg