European Commission asks for fresh austerity plan details

City A.M. Reporter
SPAIN’S and Portugal’s fiscal tightening plans this year and next are appropriately ambitious but both countries should spell out in more detail austerity steps planned for 2011, the European Commission said yesterday.

Apart from Spain and Portugal, in focus because of some financial market concerns about their ability to service debt, the European Union’s executive Commission approved progress in fiscal consolidation also in 10 other EU countries. It started disciplinary steps against three more countries – Cyprus, Denmark and Finland -- for an expected breach of the 27-nation EU’s rule that budget deficits must not exceed three per cent of gross domestic product.

The Commission proposed that Finland bring its deficit below three per cent next year, Cyprus in 2012 and Denmark in 2013.

Luxembourg and Bulgaria are now the only EU countries not in breach of the bloc’s budget rules.

The Commission assessed the progress of fiscal consolidation in Belgium, the Czech Republic, Germany, Ireland, Spain , France, Italy, the Netherlands, Austria, Portugal, Slovenia and Slovakia, as required by EU finance ministers.

“In all cases we conclude that the measures taken were sufficient to achieve the 2010 targets,” the Commison said in a statement.