Brussels, 07/03/2016 (Agence Europe) - Belgium and Slovenia have joined a group of five eurozone countries whose 2016 budgets may infringe the rules of the Stability and Growth Pact, the Eurogroup noted on Monday 7 March.
“Seven countries - Belgium, Spain, Italy, Lithuania, Austria, Portugal and Slovenia - have 2016 budgets which may not be in line with the Stability Pact”, the Commissioner for Economic and Financial Affairs, Pierre Moscovici, stated.
“We take note that developments in several member states are leading to a slightly higher deficit level in the euro area as a whole than was projected in November. At the member state level, there are increased risks that some budgets do not comply with obligations under the Pact. In general, previous commitments to ensure compliance with the Pact have yet to be translated into specific actions”, the Eurogroup observes in the statement it adopted.
The Nineteen note that in Belgium, the combined structural budgetary effort (not including conjunctural effect) for 2015 and 2016 is expected to stand at 0.5% of GDP, rather than the threshold level of 1.2% recommended in order to comply with the trajectory laid down at European level. Additionally, “the high level of indebtedness remains a cause for concern”, the Eurogroup notes, forecasting that Belgium will not meet the debt criterion under the Pact in either 2015 or 2016. According to the European Commission, Belgian public debt is likely to be 106.6% of GDP in 2016.
In Slovenia which, like Belgium, comes under the 'preventative' plank of the Pact (deficit below 3% of GDP), structural effort is expected to be 0.1% of GDP in 2016, rather than the required threshold of 0.6%.
In November, the Commission identified the 2016 budgets of four member states (Spain, Italy, Lithuania and Austria) at risk of non-compliance with the European budgetary rules (see EUROPE 11437). Portugal joined the group in February, after the new government of the country presented a draft budget (see EUROPE 11488).
Portugal, which comes under the 'corrective' plank of the Pact, has announced that it was putting together new measures to be applied when necessary and Spain has been called upon to present an amending budget once the new government is in place.
France, whose deficit is more than 3% of GDP and whose 2016 budget is expected to comply with the rules of the Pact, has a structural budgetary effort which is “substantially” below the requirements laid down, the finance ministers of the eurozone note. (Original version in French by Mathieu Bion)