Newspaper article International New York Times

E.U. Blinks over Budgets Sent by Italy and France ; Brussels Signals Approval Is Likely for Countries' Adjusted Spending Plans

Newspaper article International New York Times

E.U. Blinks over Budgets Sent by Italy and France ; Brussels Signals Approval Is Likely for Countries' Adjusted Spending Plans

Article excerpt

Officials in Brussels indicated that they would approve the countries' 2015 budgets after last-minute adjustments in the spending plans.

France and Italy avoided a political collision with the European Union when officials in Brussels indicated that they would approve the countries' 2015 budgets after last-minute adjustments in the spending plans.

The budget tweaks will still not enable France and Italy to bridge the deficit gaps that had risked prompting Brussels to reject their budgets -- with potentially damaging results for European Union diplomacy. But the concessions by Paris and Rome appeared on Tuesday to be enough to defuse the issue and avoid a confrontation just as a new executive body is about to assume power in Brussels.

In effect, the French and Italians have promised to make serious budget-cutting efforts, and officials in Brussels have agreed to believe them.

"I want to welcome the fact that these member states have responded constructively to our concerns," Jyrki Katainen, the commissioner for economic and monetary affairs, said in a statement from Brussels.

The matter is not merely academic accounting. The eurozone economy stagnated in the second quarter, and there have been indications that it might be headed back to recession. The ability of France and Italy -- the eurozone's second- and third-largest economies, after Germany -- to stimulate their economies rather than focus on budget cuts could be crucial to the speed of any eurozone recovery.

Wednesday was to have been the deadline for the European Commission, the European Union's executive arm, to approve or reject the budgets. But Mr. Katainen's statement indicated that the commission would study the budgets and offer its opinion in November.

That would seem to effectively hand the matter over to the new European Commission that is about to take office -- and whose top economic official will be Pierre Moscovici. Until April, he was the finance minister of France. …

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