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Sweden slams EU deficit 'rule benders'

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Sweden slams EU deficit 'rule benders'
Swedish Finance Minister Magdalena Andersson. Photo: Janerik Henriksson/TT
07:19 CEST+02:00
Sweden's Finance Minister Magdalena Andersson has slammed "rule bending" by several EU states seeking to rein in budget deficits, blaming largesse for their failure to hit targets.

Officially, eurozone states must keep spending deficits within 3.0 percent of gross domestic product, but for years several member states have flouted the rule.

"We are deeply worried about the disrespect for the rules in the Stability and Growth Pact," Andersson told a seminar in Vienna on Tuesday hosted by the Austrian finance ministry.

"The tendency to make the rules more and more flexible and to create additional loopholes is a cause of concern."

Andersson, whose country is not a eurozone member, said the single currency project would be stronger with better public finances, describing austerity as "a necessary evil. Or maybe even a friend".

"We have endless EU discussions among ministers and technical experts on creative accounting, on extra time for complying, on bending the rules in ever more inventive ways," said Andersson, whose country is not a eurozone member.

"The countries which are fighting hardest for changes in this direction, do they have the best growth and employment record? No, they certainly do not," she added.

France, just one of several states whose government has sought to spend its way out of economic slowdown, has twice been granted a delay to bring its deficit within the permitted ceiling.

Last week, former French finance minister-turned EU Economics Affairs Commissioner Pierre Moscovici warned Paris would receive no further leeway on meeting Brussels' rules.

Three months ago, Brussels decided against handing down fines of up to 0.2 percent of GDP to Spain and Portugal after they breached the rules.

The European Commission set a revised budget deficit target for recession-hit Spain in 2015 of 4.2 percent but Madrid hit 5.1 percent. Germany's central bank has called for those repeatedly missing the official target to be sanctioned.

But Brussels let the over-spenders off the hook in August, judging that the countries concerned had made considerable efforts to reduce deficits as they recover from the financial crisis.

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