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.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
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