A 3% of GDP target for public deficits with no growth in activity is out of reach for many countries in Europe
France, Spain and Portugal are soon likely to be granted additional time to bring their budget deficits back below 3% of GDP. A return to within the limits set by the Maastricht Treaty will probably be postponed by one year from the original deadlines of 2013 for France, and 2014 for Spain and Portugal. The likely relaxation of the deadline, proposed by the European Commission and approved by heads of State and government, forms part of the shift in emphasis seen in Europe over recent months: the policy of austerity, adopted at the beginning of the sovereign debt crisis as the ultimate remedy, has foundered on its rejection by voters and relative failure to reduce deficits.
BY Thibault MERCIER
France, Spain and Portugal are soon likely to be granted additional time to bring their budget deficits back below 3% of GDP. A return to within the limits set by the Maastricht Treaty will probably be postponed by one year from the original deadlines of 2013 for France, and 2014 for Spain and Portugal. The likely relaxation of the deadline, proposed by the European Commission and approved by heads of State and government, forms part of the shift in emphasis seen in Europe over recent months: the policy of austerity, adopted at the beginning of the sovereign debt crisis as the ultimate remedy, has foundered on its rejection by voters and relative failure to reduce deficits.
BY Thibault MERCIER
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