EU Summit Set to Loosen Deficit Shackles
By James G. Neuger & Rebecca Christie - Mar 14, 2013 10:09 AM ET
European leaders are loosening the economic shackles once demanded by Germany as the recession and mounting unemployment in southern Europe shove aside the debt crisis as the euro area’s biggest headache.
A two-day Brussels summit starting today will endorse plans for “structural” assessments of national budgets, according to a draft statement, using code for granting countries such as France, Spain and Portugal extra time to bring down deficits.
“We have to restore sound and sustainable public finances, via continued differentiated fiscal consolidation and focused on structural efforts,” European Union President Herman Van Rompuy said at a pre-summit briefing.
European politicians are cloaking the shift in language designed to reassure investors who have driven borrowing costs lower since mid-2012 that balanced budgets remain the goal. The relative calm in markets was barely disturbed by last month’s inconclusive election in Italy. Another milestone toward overcoming the crisis came yesterday, when Ireland sold 10-year bonds for the first time since its bailout in 2010.
As a result, officials in Brussels and national capitals said that an aid package for the next problem country, Cyprus, doesn’t even need to be discussed at the summit. It will be dealt with tomorrow starting at about 5 p.m., at a separate meeting of euro-area finance ministers.
More@ Bloomberg.com
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