The European Commission will later today (19 June) unveil an economic package focused on the members it sees as having excessively high budget deficits, a move likely to have explosive political consequences.
Brussels’ fiscal rules were designed to ensure the euro’s stability – and gained extra prominence when a crisis in Greece and Cyprus sent the currency into a tailspin around a decade ago.
They were suspended when Covid-19 made large government spending packages the norm – but, after much wrangling, a more flexible version of the rules was agreed earlier this year.
Under the EU’s treaty, countries can be fined if they fail to cut government spending or raise taxes enough – and it’s easy to see which countries might be in the firing line.
But that could prove significant as France, predicted to have a deficit of 5% of its economy next year, heads to legislative elections.
Stay tuned for the latest on who’s likely to be targeted.
