Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Chancellor Angela Merkel/FILE

Finance

Merkel says no need to change Europe’s budget rules

Chancellor Angela Merkel/FILE

Chancellor Angela Merkel/FILE

BERLIN, Jun 18 – German Chancellor Angela Merkel said Wednesday she sees no need to change Europe’s budget rules after her economy minister suggested that countries be given more time to get their finances in order.

“We’re agreed: there is no need to change the Stability Pact,” Merkel told reporters, referring to a strict set of EU fiscal rules requiring member states to keep their deficits in check.

“The Stability Pact as it now stands already contains all the flexibility we need to overcome the problems. We’re all convinced of that,” Merkel told a joint news conference with Tunisian Prime Minister Mehdi Jomaa.

German economy minister and deputy chancellor Sigmar Gabriel had hinted in a newspaper interview that countries such as France and Italy could be given more time to get their finances in order.

In comments that could re-start a debate over austerity and growth in Europe, Gabriel struck a conciliatory tone to countries struggling to meet the conditions of the Stability Pact.

“I’m in favour of more honesty in the debate,” he told German daily Bild.

“We Germans are in better shape than other countries because we pushed through a tough reform programme. But we, too, needed time to cut our state debt,” Gabriel said.

Under EU rules, budget deficits — the shortfall between government income and spending — should not be more than 3.0 percent of annual gross domestic product.

Accumulated debt — the sum of all those annual deficits — is supposed to be kept at 60 percent of GDP.

Merkel said she had consulted with Gabriel, the head of the Social Democrat party, ahead of a regular cabinet meeting.

Advertisement. Scroll to continue reading.

On Monday, Gabriel had joined his French counterpart Arnaud Montebourg in calling for more time for indebted European countries to implement reforms to rein in their budget deficits.

The conservatives in Germany’s left-right coalition government are opposed to any easing of deficit rules.

On Tuesday, the French national accounting court said that France was set to miss its extended target for reducing its public deficit this year.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...