Commission vice-president promises fair scrutiny of budgets

Incoming European Commission vice-president Jyrki Katainen insisted yesterday that all euro zone countries would be treated "fairly and equally" by the commission when assessing national budgets, as concern remained about France's ability to meet targets.

Ahead of tomorrow's deadline for countries to submit their draft budgetary plans to Brussels for scrutiny, EU sources confirmed that informal discussions between the commission, Berlin, France and Italy over the last two's budget plans had intensified.

In particular, France is under pressure to increase its “structural effort” next year, which the French government estimates at 0.2 per cent, just a quarter of the commission’s demand of 0.8 per cent.

Two weeks

Technically, the European Commission has two weeks from tomorrow in which it can return budgetary plans to member states for changes. But with a summit of EU leaders, and a special euro zone summit, scheduled for next week in Brussels, France needs to show that it is prepared to meet the concerns of the commission.

Similarly, Germany is facing calls to concede some ground in terms of fiscal flexibility, by sanctioning some form of investment scheme. German finance minister Wolfgang Schäuble said last week that "writing cheques" for the euro zone was not a solution to its economic problems.

Speaking after yesterday's meeting of euro zone finance ministers in Luxembourg, Mr Katainen said it was "premature" to speculate on the commission's verdict on any particular country. However, he said it was a "question of fairness and credibility" that the EU's economic governance model was upheld. Eurogroup head Jeroen Dijsselbloem said he was confident France would "send forward a very sound French budget".

Investment

Discussions will continue today at the Ecofin meeting of all 28 European Union countries on ways to stimulate investment and growth in the flagging European economy, with the Italian presidency of the Council of the European Union keen to secure agreement on an investment package, though any detailed plan remains elusive.

Euro zone finance ministers also discussed the Greece bailout during yesterday's meeting, but Mr Dijsselbloem said any decision on a possible succession plan to the EU bailout which runs until the end of this year would be discussed in November and December. Mr Dijsselbloem stressed yesterday the importance of a "sustainable exit" for Greece.