The European Commission has warned a host of EU nations that they are at risk of infringing EU rules regarding excessive deficits.
The Commission has warned that eight euro-zone nations are at risk of “non-compliance” in 2017, for violating EU restrictions which stipulate that member countries cannot acquire deficits higher than 3 percent of their total economic output.
The countries in question include Spain and Portugal, who have already received warnings on the matter. For 2015, Spain’s deficit totaled 5.1 percent of its gross domestic product (GDP), whilst Portugal’s hit a concerning 4.4 percent. Despite its initial warning, the commission gave both countries the opportunity to re-organise its finances and reduce their deficits. However, the evident lack of progress in this respect has prompted renewed concern over the economic situation facing the continent.
Italy also remains a concern, as it continues to suffer from an increasingly stagnant economy. The EU Economics Affairs Commissioner, Pierre Moscovici, attributed the continued strain on Italy’s finances to the series of recent earthquakes that devastated central Italy.
“For Italy, a significant part of deviation is due to the costs associated with seismic activity in the country, which has been very serious this year and dramatic,” he said.
He added that the circumstances will be taken into consideration by the Commission. However, more trouble for Italy may be yet to come with the upcoming constitutional referendum potentially promising political upset, as the future of Prime Minister Matteo Renzi’s government hangs in the balance.
The additional five nations warned over rising deficits were Belgium, Cyprus, Finland, Lithuania and Slovenia. However, the EU commission only has the ability to fine those countries that use the Euro.
Elsewhere in Europe, President Barack Obama is in Greece to discuss “durable” economic recovery, a country which has ultimately failed to show signs of recovery from the 2009 financial crisis. In addition, Mr Obama used the opportunity to encourage extra provisions to safeguard economic growth across the continent. He stated:
“To the rest of Europe I will continue to emphasise our view that austerity alone cannot deliver prosperity.”
The visit to Greece marks Mr Obama’s final trip to Europe, as his presidency draws to a close.
Find out what Mr Trump’s election may mean for Europe, here.