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.
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
NEW GEAR: On top of the new Tien Kung IV air defense missiles, the military is expected to place orders for a new combat vehicle next year for delivery in 2028 Mass production of Tien Kung IV (Sky Bow IV) missiles is expected to start next year, with plans to order 122 pods, the Ministry of National Defense’s (MND) latest list of regulated military material showed. The document said that the armed forces would obtain 46 pods of the air defense missiles next year and 76 pods the year after that. The Tien Kung IV is designed to intercept cruise missiles and ballistic missiles to an altitude of 70km, compared with the 60km maximum altitude achieved by the Missile Segment Enhancement variant of PAC-3 systems. A defense source said yesterday that the number of
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
Taiwanese exports to the US are to be subject to a 20 percent tariff starting on Thursday next week, according to an executive order signed by US President Donald Trump yesterday. The 20 percent levy was the same as the tariffs imposed on Vietnam, Sri Lanka and Bangladesh by Trump. It was higher than the tariffs imposed on Japan, South Korea and the EU (15 percent), as well as those on the Philippines (19 percent). A Taiwan official with knowledge of the matter said it is a "phased" tariff rate, and negotiations would continue. "Once negotiations conclude, Taiwan will obtain a better
RSS