EU finance ministers cleared a major hurdle on Sunday in efforts to reform the rules underpinning the stability of the euro, meeting German and French demands for room to spend their way out of economic problems, officials said.
They reported a deal to ease the "Stability and Growth Pact," retaining the notion that annual budget deficits cannot exceed 3 percent of gross domestic product, but at the same time providing more leeway to legally exceed it in special circumstances.
The agreement ended five months of tortuous negotiations during which Germany and France led demands that the stability rules be interpreted less strictly by the European Commission to give governments space to stoke growth by increasing public spending.
A Dutch diplomat said Germany's partners rejected Berlin's long-standing demand its massive German unification payments be seen as a valid reason to violate the stability pact's austerity rules.
Germany already has spent some 1.5 trillion euros (close to US$2 trillion) on its post-Cold War reunification finance since 1990.
Room to overshoot
"But there is an agreement by the finance ministers to consider unspecified `European unification' costs as a credible reason to overshoot the 3 percent deficit target," said the official.
In that case a government may post a budget gap of 3.5 percent of GDP, but only "temporarily," the official said.
The ministers continued to debate demands by eastern EU members, which joined the EU last year, that their expensive efforts to build up pension funds will not be used to keep them out of the euro in future years.
Officials expected the issue to be resolved.
The reform of the euro rules were contained in a 19-page report, drafted by Luxembourg Premier Jean-Claude Juncker, whose country now holds the rotating EU presidency.
They aim to strengthen and clarify the euro rules' application by the European Commission.
Berlin, Paris, Rome and some other capitals have complained the commission has been heavy-handed and inflexible in that so far.
Five years to comply
Under Juncker's plan, countries exceeding the 3 percent budget norm may in the future invoke their own reasons why they should be allowed to violate the stability rules -- a move that points to a looser interpretation of a country's economic performance and outlook.
Any country exceeding the deficit limit may get up to five years to come back into compliance.
Germany is keen to cite its large contributions to the EU budget -- of which it pays 22 percent -- as a mitigating circumstance to miss the 3 percent deficit rule.
France wants to use its spending on research and defense as an excuse to break through that ceiling without getting notices from the European Commission.
It was expected the new stability rules -- replacing those written in the late 1990s -- will be endorsed by the 25 EU leaders, who are to open a two-day summit in Brussels today.
‘UNFRIENDLY’: Changing the nationality listing of Taiwanese residents to ‘China’ goes against EU foreign policy as well as democratic and human rights principles, MOFA said Taiwan yesterday called on Denmark to correct its designation of the nationality of Taiwanese residents as “China” or face retaliatory measures. The Danish government in 2024 changed the nationality of Taiwanese citizens on their residence permits from “Taiwan” to “China.” The decision goes against EU foreign policy and contravenes democratic and human rights principles, Ministry of Foreign Affairs (MOFA) spokesman Hsiao Kuang-wei (蕭光偉) said. Denmark should present a solution acceptable to Taiwan as soon as possible and correct the erroneous designation to preserve the longstanding friendship between the two nations, Hsiao said. The issue could damage Denmark’s image and business reputation in Taiwan,
KEY INDUSTRY: The vice premier discussed a plan to create a non-red drone supply chain by next year, which has been allocated a budget of more than NT$7.2 billion The government has budgeted NT$44.2 billion (US$1.38 billion) to cultivate Taiwan’s uncrewed aerial vehicle (UAV) industry over the next five years, which would make the nation a major player in the industry’s democratic supply chain in the Asia-Pacific region, Premier Cho Jung-tai (卓榮泰) said yesterday. Cho made the remarks during a visit to the facilities of Cub Elecparts Inc (為升電裝). Democratic Progressive Party (DPP) Legislator Chen Su-yueh (陳素月) and Chinese Nationalist Party (KMT) Legislator Hsieh Yi-fong (謝依鳳) also participated in the trip. Cub Elecparts has transitioned from the automotive industry to the defense industry, which is the top priority among the nation’s
SUFFICIENT: The president said Taiwan has enough oil for next month, with reserves covering more than 100 days and natural gas enough for 12 to 14 days A restart plan for the Guosheng Nuclear Power Plant in New Taipei City’s Wanli District (萬里) and the Ma-anshan Nuclear Power Plant in Pingtung County’s Hengchun Township (恆春) would be submitted to the Nuclear Safety Commission by the end of the month, President William Lai (賴清德) said yesterday, reversing the government’s policy to abolish nuclear energy. On May 17 last year, Taiwan shut down its last nuclear reactor and became the first non-nuclear nation in East Asia, fulfilling the Democratic Progressive Party (DPP) government’s pledge of a “nuclear-free homeland.” Even without nuclear power, Taiwan can maintain a stable electricity supply until 2032,
DEROGATORY: WTO host Cameroon’s designation of Taiwan as a ‘province of China’ seriously undermines the nation’s status and rights as a WTO member, MOFA said The Ministry of Foreign Affairs (MOFA) yesterday condemned Cameroon for listing Taiwan as “Taiwan, Province of China” in visa documents for an upcoming WTO ministerial conference, a move that led to Taiwan’s withdrawal from the event. The designation “seriously undermined” Taiwan’s status and rights as a WTO member, the ministry said in a statement. It is the first time since 2001 that Taiwan has declined to attend a WTO Ministerial Conference. The conference is scheduled to take place from Thursday to Sunday next week in Yaounde, the capital of Cameroon. Taiwan had planned to send a delegation led by Minister Without Portfolio
RSS