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Latest update : 2009-03-24

The European Commission has given France and Spain until 2012 to bring their deficit to under 3 %, according to EU budgetary rules. Greece hasn't been granted such a large deadline and has to lower its deficit by 2010.

AFP - The European Commission will on Tuesday give Greece until 2010, France and Spain to 2012 and Ireland until 2013 to bring their budget deficits into line with EU rules, an official said.
Under EU rules, the bloc's member countries are supposed to keep their budget shortfalls to less than three percent of gross domestic product although they are allowed some leeway when the economy sours.
In January, the commission forecast that the four countries' deficits would swell well beyond the three-percent limit as government spending surged and tax revenues dropped on weak economic activity.
It estimated that France would have a deficit this year of 5.4 percent of GDP, Spain of 6.2 percent, Greece of 3.7 percent and Ireland a stunning 11.0 percent.
The deadlines will be set for the four countries on Tuesday when the commission gives an update on member states' progress towards bringing down their deficits, the official said on condition of anonymity.
The commission, which polices deficits in the EU, already opened disciplinary proceedings against the four countries, as well as Latvia and Malta, for allowing their deficits to jump.
If a eurozone country flaunts the rules over an extended period, it could in theory face hefty fines although no country has yet met that fate.

Date created : 2009-03-24