Some countries in the 12-nation euro zone may get elbow room in the form of a controlled increase in their public deficits to deal with economic slowdown, but France and Germany will have very little maneuvering room, the European Commission said Wednesday.
In a document on "Public Finance in Monetary and Economic Union," the commission stressed that budgetary balances in euro-zone countries should deteriorate in 2001...thus marking the first reversal in the trend toward budgetary health stability since 1993."
Euro-zone countries are committed to achieving public surpluses in times of growth.
Since the euro was created the European Central Bank and the commission have urged euro countries, and notably Germany, France and Italy, to use the fruits of growth more for reducing deficits and debt, and less for welfare, tax cuts or measures to support activity.
"The risks of deterioration are increasing and (economic) growth is showing signs of slowing in most of the countries," said the report -- BRUSSELS (AFP)
