Brussels, 27/03/2007 (Agence Europe) - Assessment of Spain's and Belgium's stability programmes (see EUROPE 9381) brought a “very positive” report, with both countries showing a budget surplus, Commissioner Joaquin Almunia said on Tuesday. Despite this “good work in terms of budgetary discipline”, both should continue on this same path because they will both have to face considerable challenges, particularly given the ageing population, warned Mr Almunia at the press conference which followed the Ecofin Council. He called on Bulgaria and Romania, whose convergence programmes were also approved by member states, to be vigilant. The budgetary situation in Bulgaria is “rather good”, it is in surplus, but procyclical policies should be avoided. In Romania, meanwhile, overheating of the economy requires stricter budgetary policies. In Latvia, which recorded one of the highest inflation rates last year (6.6%), budgetary policies do not do enough to correct the overheating of the economy. After the Latvian convergence programme was sent, a new anti-inflation plan was adopted, Mr Almunia was pleased to note.
“Yes, there is a kind of agreement with the Commission which says that boom periods should be used to reduce deficits,” but if member states can correct their deficits of more than 0.5% of GDP, there is nothing to make them, stressed German minister Peter Steinbrück. Picking up on what Mr Juncker had said the previous evening after the Eurogroup meeting (see related article), Mr Steinbrück said, “We would like it, but there is no obligation, no requirement” in this direction. (ab)