Greece one step away from massive fines

EU Observer ^ | Feb 17 2005 | Richard Carter

[SunkenCiv]

Greece is one step away from being the first member state to face huge fines for breaking the EU's Stability and Growth Pact - the rules underpinning the euro... If Athens fails to achieve this, it could be fined up to 0.5 percent of its GDP - roughly 500 million euro. And the Greek government must produce a report in March on how it intends to reduce its deficit. Greek Finance Minister Giorgios Alogoskoufis told reporters that Greece would "fulfil its obligations" and was grateful for the extra year to do so. Finance ministers judged that to force Greece to slash its deficit by the end of this year "may prove economically costly".

[Go Gordon]

What a great idea, fine a country for going into a deficit.

Sort of like suspending a student for cutting class?

[Go Gordon]

France and Germany are BOTH in violation. If I were any of the smaller countries, I would demand that they be fined first.

Where does the money from the fines go? If all countries are in violation, would they all just call it a wash?

[Malesherbes]

Correct me if I'm wrong, but I believe it was a Greek Socialist government that created the problem by cooking the books, and it is now a Greek Conservative ("conservative" by Greek standards) that has to clean up the mess.

[SunkenCiv]

Good comments, all. Update.

Ministers clinch deal on euro rules reform
by Richard Carter
21.03.2005

The main sticking point during negotiations was a debate over what factors should be considered when deciding whether to punish a country in breach of the rules – as France and Germany have been for three consecutive years... Smaller member states felt that there were too many exceptions on the list and bigger states – notably France and Germany – felt that there were too few. This row was solved by the removal of the list from the proposal... The Pact has also been softened in terms of the amount of time a member state is allowed to correct its deficit problem... The only finance minister not entirely happy was Austria’s Karl-Heinz Grasser, who has consistently argued that the Pact should not be loosened.

[SunkenCiv]

Brussels to pursue Greece and Hungary for breaking euro rules
EUobserver | Dec 26 2004 | Richard Carter
Posted on 12/25/2004 4:48:26 PM PST by SunkenCiv
http://www.freerepublic.com/focus/news/1308437/posts

[SunkenCiv]

CIA - The World Factbook -- France
last updated on 10 February, 2005
http://www.cia.gov/cia/publications/factbook/geos/fr.html

"The current government has lowered income taxes and introduced measures to boost employment. The government is focusing on the problems of the high cost of labor and labor market inflexibility resulting from the 35-hour workweek and restrictions on lay-offs. The government is also pushing for pension reforms and simplification of administrative procedures. The tax burden remains one of the highest in Europe (43.8% of GDP in 2003). The current economic slowdown and inflexible budget items have pushed the 2003 deficit to 4% of GDP, above the EU's 3% debt limit. Business investment remains listless because of low rates of capital utilization, sluggish demand, high debt, and the steep cost of capital."

Business blamed for lack of growth
18.04.2005 - 18:13 CET | By Meghan Sapp
http://www.euobserver.com/?aid=18876&print=1