The UK is among worst offenders for breaking EU’s budget rule, says German think tank
The UK is one of the worst offenders for violating the EU’s budget deficit limit of three per cent of GDP, according to research by German think tank Ifo Institute.
The report, that comes ahead of the release of the UK's public sector finances tomorrow, found that Britain recorded a total of nine violations since 1999 out of which two, one in 2008 and another in 2009, were permissible because the country was in recession.
The UK violated the budget deficit rule every year since 2010 when George Osborne became chancellor of the exchequer.
Under Gordon Brown's 10-year stint as Britain’s longest-serving modern chancellor, the UK broke the EU budget rule in 2003, 2004 and 2005.
Under his successor Alistair Darling’s tenure, Britain broke the rule in 2008 and 2009 but this was allowed due to the country's being in recession.
France was named the worst offender by the research with 11 violations, ahead of Greece, Portugal and Poland (10 each). Other defaulters on the list included Italy (eight) Hungary (seven) as well as Ireland and Germany (five each).
Meanwhile, Luxembourg, Estonia, Finland, Denmark and Sweden exhibited the strongest budgetary discipline with zero violations each.
The report found that out of a total of 165 instances of EU states violating the rule, only 51 cases were permissible as the respective countries were in recession while 114 cases were not permissible.
Ifo president Clemens Fuest said: "The number of violations is astonishing. Apparently, the rules do not work. In none of these cases were fiscal sanctions imposed, as is actually foreseen. This is why other mechanisms are needed."