The European Commission has sent a tough message to 12 EU member states, warning that their forecasts for economic conditions in the future were too optimistic and could mean that they will miss their target of getting their public deficits down to 3% in the next few years.
On 17 March, the Commission published its assessment of the budget forecasts of 14 EU countries for 2010-14. The Commission was especially tough on the UK, which, it said, needed to do more to get its deficit down to 3% by 2014-15. The UK’s own figures put its deficit at 12.7% this year and only falling to 4.7% in 2014-15.
The Commission is also warning Germany that its budgetary plans will not do enough to get its debt level on a downward path. German government debt stood at 72.5% of gross domestic product (GDP) in 2009-10, but is expected to rise to 82% in 2014-15.
Only two countries, Bulgaria and Estonia, are expected to keep their deficits below 3% of GDP over the period. The two countries are hoping to join the eurozone within a few years.
Member states’ public deficits and debt levels have soared as the economic crisis has cut tax revenues and increased the cost of welfare payments, while governments have spent billions of euros to save ailing banks and prop up industries such as carmaking.
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