BRUSSELS May 22 Euro zone countries have
improved their fiscal stance, a sign of the bloc's growing
financial stability, but France and Spain remain above deficit
limits set by EU rules and Italy still faces "urgent"
challenges, the EU Commission said on Monday.
The assessment came in a regular report that the EU
executive publishes every spring to recommend economic reforms
to the 28 EU member states and take disciplinary measures
against those with unbalanced fiscal positions.
The 19-country euro zone has lowered its total budget
deficit to 1.5 percent of the bloc's gross domestic product
(GDP) in 2016. The gap is to fall further this year and next,
well below the 3 percent of GDP required by EU rules.
The EU as a whole had an aggregate deficit of 1.7 percent
last year, which is also set to decrease.
Because of improving public finances in Portugal and
Croatia, the Commission said it wanted to end a disciplinary
budget procedure against them. The Commission's view will have
to be backed by EU finance ministers later this year.
But the economic recovery and improvements in budget
positions were "uneven," Economics Commissioner Pierre Moscovici
France, the euro zone's second largest economy, remains
under thy disciplinary procedure for its deficit above 3 percent
of GDP. The gap is set to go down this year but to grow again
above the threshold in 2018, contrary to EU recommendations,
unless the government appointed by French President Emmanuel
Macron approves new economic reforms in coming months.
Spain, Greece and Britain also remain under the disciplinary
procedure for their excessive deficits, the Commission said.
Italy has very high public debt, the blocs' second biggest
after Greece, and is included in a group of countries that face
The Commission considered additional budget measures adopted
by Rome in April as sufficient to keep Italy's accounts in line
with EU rules for this year.
(Reporting by Francesco Guarascio @fraguarascio)