EC Puts Italy, France on Economic Watch-List, Praises Spain

Business » FINANCE | March 6, 2014, Thursday // 16:33| Views: 1182 | Comments: 6
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Bulgaria: EC Puts Italy, France on Economic Watch-List, Praises Spain Photo by EPA/BGNES

Italy and France have been placed on an economic "watch-list" by the European Commission.

High debt and deficit levels are the reason for the EC's decision to put the second and third-largest Eurozone economies among 14 nations with "imbalances", according to a report published on Wednesday and cited by EUObserver.

The EC believes that with "high public debt and weak external competitiveness", Italy has many issues to tackle, including misalignment between wages and productivity, a high labour tax wedge, an unfavourable export product structure and a high share of small firms which find it difficult to compete internationally.

Its debt, which had remained around 100% of GDP for years, reached 130% in 2013, and the country is now ranking second in the EU (after Greece) in fiscal liabilities.

France, on the other hand, will be required to reduce its budget deficit to 3%, in accordance with the EU's fiscal stability pact which was signed by most member states at the end of 2011.

Both member states will be subject to strict monitoring programmes by the Commission.

Other countries, like Slovenia and newly-joined member Croatia, were called upon to impose urgent austerity programmes.

Apart from negative EC's findings, Spain was praised for its successes in economic recovery that have been observed since 2013.

Spain has accumulated an account surplus instead of the previous deficit, increased its competitiveness and taken steps toward stabilization of the housing market.

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» To the forumComments (6)
#6
George Zheliazkov - 7 Mar 2014 // 01:42:33

Behemoth,
Of course he is responsible to the citizens of Ukraine but the bottom line here is that all of this is very much his fault. He was living like a king in Ukraine and failed to deliver prosperity to his people. This in turn created opportunities for meddling… Now millions of people will suffer for decades because of him.
Russia and Ukraine will be losing billions of euros thanks to Yanukovich’s inability to rule. So the Russians shouldn’t offer him a shelter….
We wouldn’t be even talking about Ukraine if he did his job properly.
Now the EU taxpayers will be kicking 11 billion loans to Ukraine even though probably the US stir more troubles….

Anyways it’s a big mess and everybody will be paying for it.

#5
Behemoth - 6 Mar 2014 // 23:12:59

George,

I am a bit puzzled by your sentence: "Actually the Russians should've punished the ex Ukrainian president for a failure to deliver prosperity." Huh? Since when is the Ukrainian president responsible not toward the citizens of Ukraine but to Russia? Is he a spy and traitor that swore loyalty not to the Ukraine but to Russia? When someone should punish the Ukrainian president for his failure it is the citizens of his own country - and this is what they indeed did!

#4
Ioseb Jugashvili - 6 Mar 2014 // 21:58:42

George is nothing but a bitter balkan monkey who emigrated years ago to the west, lives off government handouts and spends his days getting drunk on rakia, typing incoherent rants about the 'good old days' of totalitarian communism whilst repeatedly soiling himself.

#3
George Zheliazkov - 6 Mar 2014 // 21:19:54

Listen Behemoth,
I'm not comparing Russia with the EU. Let me clarify, it was realy stupid to create all that friction for a small piece of land like Crimes. Russia should've just leaved the Ukrainians do whatever they want and not waste time, money and reputation.... Actually the Russians should've punished the ex Ukrainian president for a failure to deliver prosperity. Like I said this whole thing shouldn't happen. Over all we also have to be more objective and NOT intentionally demonize countries and nations which the west is doing about Russia. China is still communist but everybody continues to blame Russia for everything....
About the economics, Russia is rich in natural resources and the EU and Asia need it. Russia will do ok, but all those frictions with Ukraine could've been avoided.
The EU has a VERY serious problems and only cooperation and flexibility with the emerging markets will help... Now of course we know that things went wrong with Russia... Which will complicate and stagnate EU recovery.

#2
Behemoth - 6 Mar 2014 // 20:56:09

Well George, 11 billion is not really such a big amount if you compare it to the money that went to the bailed-out banks in the past. And it is even a small amount when you compare it to what the meltdown of the Moscow stock market and the collapse of the ruble cost Russia. The Russian Central Bank had to spend already a very big part of its currency reserves to buy rubles and stabilize the exchange rate a bit but it won't be able to do so for long. Russia is doomed economically after this adventure, every economist can tell you. And in the future it will be only respected by countries like North Korea and other "rogue states". Congratulations, Mr. Putka! ROFL

#1
George Zheliazkov - 6 Mar 2014 // 19:52:20

Yeah, the EU is in a real trouble, France is in a recession, Italy is falling apart and so is Britain realistically Scotland wants to separate, the country is drowning in floods…
Spain has almost 30% unemployment, and so are Portugal and many other countries.
On the other hand the EU is planning to give Ukraine 11 billion, now the question here is:
How much more load can the German taxpayers take, which happens to be the only financially sound economy in the EU?
Not much more in my opinion, soon things will be back to stagnation…