Budget discipline
June 9, 2009
"Everybody agrees that we need an exit strategy," EU Commissioner for Economic and Monetary Affairs Joaquin Almunia told journalists after the ministers met in Luxembourg on Monday.
"We need to orient our public finance consolidation towards a sustainable position over the medium term," Almunia said. "The moment we start implementing these exit strategies will be the moment our recovery gains traction."
He added that EU economies would begin showing positive GDP (gross domestic product) figures in the second and third quarters of 2010.
Commission warnings
The European Commission also says it will formally warn eight euro-zone nations -- including Germany -- against breaking EU rules by overspending on economic stimulus packages.
Germany's budget deficit is expected to reach 3.9 percent of GDP in 2009.
The European Union expects it to rise to 5.9 percent in 2010 -- almost double the 3 percent limit imposed by the EU Stability and Growth Pact that safeguards the stability of the euro.
The European Commission forecasts that 13 out of the 16 countries sharing the common currency will breach the 3 percent rule in 2009 and 2010.
The euro-zone ministers shot down a French proposal last week to relax the rules to allow "special treatment" for overspending related to economic recovery efforts.
German Finance Minister Peer Steinbrueck, who's known for being a staunch advocate of fiscal discipline, criticised the French plan for putting "the credibility of the Stability and Growth Pact … into doubt."
sje/afpe/dpa
Editor: Sonia Phalnikar