20 August 2001, 12:03 EU to allow higher-than-planned budget deficits for 2001, 2002 - Reynders aide
FRANKFURT (AFX) - The EU is to allow countries to post higher than
previously planned nominal deficits this year and in 2002, reneging on
its earlier budgetary goals, Handelsblatt reported, citing an aide to
Belgian finance minister Didier Reynders.
The aide, Marc Marchal, told the paper allowance will be made for
countries which have been hit by the economic slowdown.
He added this course had been unanimously agreed by the eurogroup
of finance ministers at its meeting on July 9.
"The finance ministers want to take account of the economic
downturn more strongly than has been the case so far," Marchal said.
The paper said the new course would be of help to Italy and
Germany, both of which are expected to post high budget deficits this
year.
The Bundesbank said last week Germany's budget deficit this year is
likely to be at least 2 pct of GDP, compared with the government's
target of 1.5 pct.
The paper added German finance minister Hans Eichel and his French
counterpart Laurent Fabius want to relax the rules of the EU stability
and growth pact.
It said the ministers are unhappy their governments have to set
annual budget deficit goals and want spending targets to be formulated
differently.
Marchal told Handelsblatt a revision of the stability pact had yet
to be discussed. "This could change after the summer holiday at the
start of September," he said.
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