The EU is 'too lenient' on overspending Italy: auditor

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Italian Prime Minister Matteo Renzi said earlier this month that the country would keep its pledge to reduce its debt ratio in 2016. Photo: Alberto Pizzoli/AFP
16:25 CEST+02:00
The European Commission is too lenient in applying its own budget rules to overspending member states such as France and Italy, the EU's official auditor said on Tuesday.

The commission, the EU's executive arm, is empowered to apply strict limits on public deficit and debt levels in the European Union, but the auditors said Brussels went too easy on offenders.

The commission "must be more strict," Milan Martin Cvikl, the member of the Court of Auditors responsible for the report, said in a press statement.

"It is not sufficiently aware of what is happening on the ground and it is not applying the rules consistently," he said.

Since the debt crisis, the EU has been empowered to slap penalities on countries that violate pre-agreed deficit or debt targets, but the commission has yet to apply these newly-acquired measures to the rule breakers.

The 120-page report said that even though "detailed procedures and guidelines" on budgetary discipline exist, "there are problems with the commission's implementation of these tasks.

"This is because the Commission did not make full use of its powers to enforce" compliance by member states in applying the rules.

The report also cites a lack of resources and "poor record-keeping" from the commission's teams.

The report was based on studies of the work between 2009 and 2015 with six EU countries: Italy, France, Germany, Czech Republic, Cyprus and Malta.

Italy and France have consistently come in the cross-hairs of the European Commission for repeated violation of public spending targets.

But the countries, two of the most powerful members of the EU, have eluded punitive measures by the commission, which has drawn criticism that Brussels will not dare challenge governments on so sensitive an issue.

As an example, the auditors said last year's recommendation to grant France another reprieve "did not contain data in support of the baseline scenario... or any detail of additional discretionary revenue measures" France had promised in return for the delay.

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At a news briefing, Commission spokeswoman Annika Breidthardt said the EU welcomed the court's work, "which can contribute positively to our own continuous effort to improve the functioning of the ... process".

Italian Prime Minister Matteo Renzi said earlier this month that the country would keep its pledge to reduce its debt ratio in 2016 for the first time in eight years.

The economy grew by 0.8 percent in 2015 after three consecutive years of contraction. But growth has been sluggish since, with forecasts for the first and second quarter of this year at 0.3 percent.

Growth would need to pick up speed in the second half of the year in order to reach the 1.2 percent target for 2016, down from the previous forecast of 1.6 percent.

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