The Economic and Monetary Affairs Commissioner, Mr Joaquin Almunia, has insisted that a proposed reform of the Stability and Growth Pact is not directed towards any single member-state but is designed to benefit the euro-zone as a whole.
Speaking at a conference in Italy, Mr Almunia said that plans to allow greater budget flexibility to countries with low levels of public debt were not designed to penalise Italy, which has the highest level of public debt of any of the EU's big member-states.
"This is not against anyone. It is for everyone. The proposals are good for everyone. I hope to convince all the members of the European Union of that," he said.
The Commission's proposals, which Mr Almunia announced on Friday, would give governments more leeway in running budget deficits during periods of low economic growth but would increase pressure on member-states to reduce public debt. Mr Almunia denied the changes were designed to loosen the pact in order to allow Germany and France to escape sanctions for running up excessive deficits.
EU finance ministers last year defied Mr Almunia's predecessor, Mr Pedro Solbes, by suspending the pact rather than punish France and Germany, a move the European Court of Justice ruled to be illegal.
The debate over the proposed changes, which must be approved by EU finance ministers, is expected to last a number of months. Most EU governments have welcomed the proposals but the European Central Bank (ECB) signalled last week that it would oppose any change to the wording of the regulation governing the pact.
Mr Almunia wants, however, to change the regulation's definition of the "exceptional circumstances" under which governments would be allowed to breach the budget deficit limit.
The regulation says a deficit will be considered exceptional if it is due to "an unusual event outside the control of the member state concerned and which has a major impact on the financial position of the general government, or when resulting from a severe economic downturn".
The regulation adds that the Commission "shall, as a rule, consider an excess over the reference value resulting from a severe economic downturn to be exceptional only if there is an annual fall of real GDP of at least 2 per cent".
The EU finance ministers may take into account "any observations made by the member state showing that an annual fall of real GDP of less than 2 per cent is nevertheless exceptional in the light of further supporting evidence, in particular on the abruptness of the downturn or on the accumulated loss of output relative to past trends".
Mr Almunia wants an exception made "for protracted slowdowns as opposed to only severe recessions as is now the case". This would benefit states such as Germany, which has experienced a long period of very low growth but not an abrupt recession.
Mr Almunia also wants to give governments more time, if necessary, to bring their budget deficits under control, so that corrective measures should not exacerbate the economic slowdown that may have caused the excessive deficit.
