Today’s European media outlets widely focus on the fact that yesterday, the European Commission issued its 2016 country-specific recommendations (CSRs), setting out its economic policy guidance for individual member states for the next 12 to 18 months. Despite their budget slippage, Spain and Portugal have not received any sanction from the European Commission and have been given an extra year to honour their deficit-reduction commitments, Les Echos notes. To justify this decision, EcoFin Commissioner Pierre Moscovici said “the rules must guarantee budget discipline, but they weren’t written to harm recovery and growth”. “We consider that this is not the right moment for the next step in the procedure, neither economically or politically,” he added as reported by Het Financieele Dagblad. Greek media add that the issue will be re-examined at the beginning of July. Moreover, Les Echos says that EC President Jean-Claude Juncker, who said he would head a “political” European Commission, is making good on his word as through this decision he is neither interfering in the Spanish general elections next month nor punishing the Portuguese government for the mistakes made by the previous government.
An editorial in The Wall Street Journal Europe congratulates Mariano Rajoy for “winning a game of fiscal chicken” against Brussels. Indeed, the Spanish Prime Minister promised more tax cuts if he wins June’s election. The European Commission called on Spanish authorities to make additional structural efforts estimated at around €8 billion, El Mundo writes. The new deadline for Portugal will be 2016, and for Spain 2017, theguardian.com reports. In TSF, David Dinis writes that Portuguese Prime Minister Antonio Costa is a lucky man, enjoying the benefits of a more political European Commission and a socialist European Commissioner for Economic Affairs. In his commentary for Die Tageszeitung, Eric Bonse estimates that this decision to postpone sanctions is “wise”. In Sole 24 Ore, Adriana Cerretelli says that the risk of deflation and the “success story” of Europe’s aggregate deficit offer the European Commission an “alibi” to soften its verdict on national reform and stability programmes in the EU.
L’Echo’s Vincent Georis comments that the European Commission avoided a new austerity clash within the EU. On the contrary, in Bild Zeitung, Jan W. Schäfer criticises the fact that EU member states “have learnt nothing from the Greeks’ mistakes” as Spain, Italy and France continue to pile up national debts. He further denounces the European Commission which “sympathises with the deficit sinners”. In Frankfurter Allgemeine Zeitung, Werner Mussler shares this view, deeming that European Commission’s interpretation of the EU stability pact “ridicules” the fiscal and economic control of EU member states established during the euro crisis. In Le Figaro’s front-page editorial, Gaëtan de Capèle also criticises the European Commission for not imposing sanctions. “We can barely recognise the Commission, which used to swiftly wield the whip against the euro area’s laggards, and now appears as benevolent, careful to smooth things over and not to antagonize anyone”, he says. An editorial inTalouselämä even goes further, asking: “Do you still remember the time when the European Union followed its own economic rules? Perhaps not, because the rules were never followed”.
In Les Echos’ editorial, Etienne Lefebvre writes that this postponement shows the structural weakness of the EMU once again. He thus suggests simplifying the stability pact and moving towards deeper euro area integration in order to introduce true common governance. He deems that without further sovereignty sharing, the budget pact will continue to be regularly ignored. Moreover, Le Soir’s Jurek Kuczkiewicz writes that it is time to rethink the Pact’s objectives and functioning as the context today has changed since its conception.
Many media comment on the European Commission’s recommendations for their home countries. In an interview with 20 Minutes, Commissioner Pierre Moscovici says that for France they revolve around three themes: the decrease of the public deficit below 3% of GDP in 2017, the fight against unemployment and the improvement of business competitiveness. Croatia, France and the UK will remain under strict supervision as their deficits exceed 3% of GDP, Vima FM Radiofoniko Pantopoleio says. On the other hand, Cyprus, Ireland, and Slovenia are no longer under supervision, since their deficits dropped below the 3% threshold. Delo reports that after several long years, Slovenia will break free of the unpleasant EC supervision imposed due to the violation of EU fiscal regulations. Regardless of the fact that the Maastricht criteria have been met, Slovenia must continue to lower its deficits and to implement some measures, Dnevnik states.
Irish media widely comment that the European Commission has recommended that Ireland leave the excessive deficit procedure after seven years, a period of economic scrutiny by the Commission. In a commentary for La Repubblica, Tonia Mastrobuoni argues that this time Germany did not play the role of a hawk backing rigour inside the European Commission, and backed President Jean-Claude Juncker and First Vice-President Frans Timmermans in granting generous budget leeway to Italy. However, the EC asked Rome to solve the non-performing loans problem and boost its competitiveness in order to strengthen its economy and stabilises its public finances, Andrea Bonanni notes in La Repubblica.
Ziniu Radijas details the recommendations from the European Commission received by Lithuania: improve its health care system and reduce the tax burden on the lowest earners. Rzeczpospolita says that the report does not include any special recommendations for Poland as the country is expected to continue its rapid economic growth, driven by strong domestic demand. Kathimerini underlines that Greece has not received recommendations, as it is under a fiscal consolidation programme. Other media, mainly from Greece, focus on the IMF’s generous Greek debt offer. According to Les Echos, by offering a long freeze on Greek repayments, the IMF required European governments to position themselves on the issue.
While German minister Wolfgang Schäuble has always been hostile to an interest payment freeze, he also wants the IMF to remain a stakeholder in the third Greek bailout plan, as an essential counterbalance to the European Commission’s crisis management, deemed more political and therefore less rigorous. In Handelsblatt, Ruth Berschens and Jan Hildebrand write that Wolfgang Schäuble appears determined to postpone debt relief for Greece to 2018, thus avoiding a decision by the German parliament before the German general elections.Mega TV comments that Brussels, in a surprising move, has lowered its expectations for a full agreement next Tuesday, due to the disagreements between Germany and the IMF. However, the Greek government submitted yesterday to the Hellenic Parliament a multi-bill with €1.84 billion worth of measures, which will “unlock” the disbursement of the aid instalment to Greece, Kathimerini reports.
©europeanunion2016
