EU raps Brown's knuckles
Commission takes steps under the excessive deficit procedure for France, Greece, Ireland, Spain and UK
"The United Kingdom is under the excessive deficit procedure since July 2008, when the Council recommended, on the basis of a Commission proposal, to bring the general government deficit below 3% of GDP by 2009/10. But since then the budgetary situation has worsened substantially on account of the sharper-than-expected economic slowdown and the deficit-increasing discretionary measures adopted by the UK in line with the European Recovery Plan.According to the 2008 update of the UK's convergence programme, the deficit in 2009/10 is projected to reach 8.2% of GDP, with the discretionary loosening accounting for around one-third of the increase over the previous year. The January forecasts of the Commission envisage an even sharper contraction in economic activity and project a deficit in 2009/10 of 9½% of GDP. The government gross debt ratio, which was close to 40% of GDP in 2007/08, is expected by the UK authorities to rise considerably to almost 70% of GDP in 2013/14.
Against this background, the Commission recommends to the Council to decide that, in a context of progressively weakening economic conditions, the UK authorities have not taken effective action to end the excessive deficit situation by 2009/10 and to adopt a new recommendation under Article 104.7 setting a new deadline of the 2013/14 financial year to correct the deficit below 3%. To this end, the UK authorities are asked in 2010/11 and beyond, to ensure additional annual efforts beyond those envisaged in the 2008 update of the UK's convergence programme. The UK is also recommended to reverse progressively the increase in the government gross debt ratio".
Labels: the recession, The Reckoning
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on Tuesday, March 24, 2009 at 3:56 pm.
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We hit the iceberg some time ago. Now the remaining few bulkhead doors are beginning to fail. The result, a sudden and painful end. Hopefully of Labour.
Yes, Gordon Brown's beggared up the economy, but a genuine stimulus, based upon the real economy and public works, is the only way out of this mess. The Eurocrats' comments are not only misguided, but spectacularly irrelevant: they should stick to ruining the Eurozone. We should publicly disown any "convergence" with their version of economic meltdown, the full effects of which are being witnessed in the eastern part of the EU already.
James - Agreed, there is something more than a little ludicrous about the EU yammering on about convergence.
James, I may be mistaking but didn't the Eurozone provide some kind of "protection" for countries like Slovenia and Slovakia? Whereas those who did not accept the Euro are failing and bankrupting such as Czechs, Hungarians, Polish...
Take care, Jay
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