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EC Suspends Disciplinary Proceedings Against France And Germany

by Ulrika Lomas, for LawAndTax-News.com, Brussels

15 December 2004


According to reports in the European media, disciplinary proceedings brought by the European Commission against the French and German governments over their failure to adhere to the 3% of GDP budget deficit ceiling for Eurozone countries have been suspended.

The EU Observer revealed that a report presented by Economic and Monetary Affairs Commissioner, Joaquin Almunia showed that the two countries are likely to be able to rein their budget deficits in next year, France as a result of increased growth levels, and Germany as a result of greater fiscal stringency.

Speaking to the news service, an unnamed source close to the EC observed that:

"There seems to be a real willingness to comply. No further steps are necessary...this is not a political decision and the Commission will continue to monitor the situation."

In November 2003, the French and German governments persuaded EU finance ministers to suspend the proceedings against them for the first time, an action which sent the EC to the European Court of Justice to reverse the decision. However, tempers have since cooled, and work is underway to increase the flexibility of the Stability and Growth Pact, which governs the Eurozone economies.


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