Latest news with #ExcessiveDeficitProcedure
Reuters
09-04-2025
- Business
- Reuters
Italy commits to lower deficit despite darkening outlook, sources say
ROME, April 9 (Reuters) - - Italy's new public finance targets to be unveiled on Wednesday will show the government committing to more ambitious deficit and debt reduction even as the economic growth outlook crumbles amid market turmoil over U.S. trade policy, sources said. Italy's multi-year budget framework will estimate the 2025 budget deficit at around 3.1% of national output, slightly better then a 3.3% target set in September, said the sources, who asked not to be named. Giorgia Meloni's government will likely confirm the goal of bringing the fiscal gap below the European Union's 3% of GDP ceiling in 2026, the sources added. Italy is under a so-called Excessive Deficit Procedure by the European Commission and its new budget framework, which is aimed at cutting the fiscal gap in line with EU requirements, must also comply with the latest reform of the bloc's fiscal rules. The public debt, proportionally the second-highest in the euro zone after Greece's, is seen at around 136.6% of GDP this year, down from a previous 136.9% target made in September. The economic plan, to be approved by the cabinet at meeting beginning at 6:00 pm (1600 GMT) forecasts gross domestic product will grow by 0.6% this year, down from a 1.2% target made in September, Reuters reported on Tuesday. Next year's growth in the euro zone's third largest economy is seen at 0.8%, down from a previous 1.1%, while growth is also seen at 0.8% in 2027 and 2028. Under U.S. President Donald Trump's plans announced last week Italy, which has a large trade surplus with the United States, will be subject to a general tariff of 20% along with other European Union countries.
Budapest Times
02-04-2025
- Business
- Budapest Times
Deficit close to 5 percent in 2024
According to preliminary data the deficit of the general government sector was HUF 4 002 billion in 2024, 4.9% of GDP. The balance improved year-on-year by HUF 1 097 billion, close to 1.8 percentage points as a proportion of GDP. The Hungarian Central Statistical Office reported the data to Eurostat, the Statistical Office of the European Union in compliance with the regulation on Excessive Deficit Procedure (EDP), according to the methodological requirements included in the European System of Accounts (ESA 2010). The deficit of the general government sector was HUF 4 002 billion, representing 4.9% of GDP. The debt of the general government sector at the end of 2024 – based on data of the National Bank of Hungary – reached HUF 59 875 billion, 73.5% of GDP. In 2024 the revenues of the general government sector were HUF 34 203 billion, its expenditures HUF 38 206 billion. In 2024 compared to 2023 revenues increased by HUF 2 158 billion, by 6.7%. The largest, HUF 976 billion (13.1%) increase in value was recorded in social contributions. Taxes on production increased by HUF 773 billion (by 5.9%), within it, VAT revenues grew by HUF 452 billion (by 6.4%). Revenues from taxes on income surpassed the previous year's level by HUF 599 billion (by 10.8%). . Other revenues lessened by HUF 194 billion (3.3%). Expenditures increased by HUF 1 061 billion, by 2.9%. The growth in case of paid compensation of employees was HUF 1 090 billion (14.8%). Regarding social benefits other than social transfers in kind the rise was HUF 713 billion (8.8%) intermediate consumption went up by HUF 91 billion (by 1.4%) and interest expenditures increased by HUF 506 billion (by 14.3%). Gross fixed capital formation decreased by HUF 488 billion (by 12.6%). Other general government sector expenditures went down by HUF 850 billion (by 11.1%). In the 4th quarter of 2024 compared to the same period of 2023 the general government sector had a deficit of HUF 1 749 billion, representing 8.4% of GDP. The balance improved by HUF 382 billion or by 2.5 percentage points compared to the previous year. Revenues increased by HUF 193 billion (by 2.2%). Expenditures were HUF 189 billion (1.7%) lower.
Arab News
10-03-2025
- Business
- Arab News
Uncertainty surrounds Europe's rearmament plan
In what she termed the 'era of rearmament,' European Commission President Ursula von der Leyen last week introduced a 'ReArm Europe' plan. The key goal of the scheme is to mobilize close to €800 billion ($867 billion) for European safety. Von der Leyen also expects to work in collaboration with the EU's NATO partners. The plan emerged at a time of increasing security concerns in Europe, especially given US President Donald Trump's decision to suspend Washington's military aid to Ukraine. What is Von der Leyen's plan about? What are the challenges to its implementation? And what will this suggestion mean for Europe and the rest of the world? In a press statement, Von der Leyen explained the necessity of the plan: 'The question is no longer whether Europe's security is threatened in a very real way. Or whether Europe should shoulder more of the responsibility for its own security.' She said the real question is 'whether Europe is prepared to act as decisively as the situation dictates. And whether Europe is ready and able to act with the speed and the ambition that is needed.' The European Commission president further stated that 'Europe is ready to massively boost its defense spending.' This connects to the short-term urgency to act in response to the Ukraine war, in addition to addressing the long-term necessity to take responsibility for the European security landscape. The plan is divided into three main themes. The first part involves the application of public funds for defense at the national level. In this regard, Von der Leyen suggested activating 'the national escape clause of the Stability and Growth Pact.' According to this suggestion, member states will be able to significantly boost their defense expenditure without initiating the bloc's Excessive Deficit Procedure. This would allow countries to increase their defense spending by up to 1.5 percent of gross domestic product, which could create fiscal space of close to €650 billion over four years. Among the criticisms of this step is that it is complicated because a larger deficit does not equal higher defense expenditure. Nonetheless, based on the European Commission's expectations, if all states were to increase expenditure it would generate €650 billion. However, this does not clearly indicate whether it will concern all member states or only those that spend more than the NATO-mandated 2 percent of GDP on defense. The second point involves the introduction of a new mechanism. The proposition includes €150 billion of loans to member states for defense investment. Von der Leyen gave a long list of highly expensive and sophisticated equipment and systems that could be financed under this initiative. For example, it relates to European capability involving artillery systems, air and missile defense, missiles and ammunition, and drones and anti-drone systems. She said this technique of joint procurement would decrease costs, reduce fragmentation, increase interoperability and boost the bloc's defense-industrial foundation. The third point is to apply the 'power' of the EU budget. Von der Leyen insisted 'there is a lot that we can do in this domain in the short-term to direct more funds toward defense-related investments.' This plan echoes Germany's 'Sondervermoegen' (special fund) framework, which offers a roadmap for more money for defense. Under this ongoing German experiment, which was introduced in 2022, the country can bypass its constitutional debt limits to enlarge defense investments. It is currently being revised by Berlin's political establishment. The Christian Democratic Union and Social Democratic Party are working on a plan to introduce new exemptions from the debt brake. Based on this plan, any defense expenditure over 1 percent of GDP would be exempt. For example, if NATO increased its goal to 3 percent of GDP, then 2 percent (€88 billion) would be exempt, while 1 percent (€44 billion) would still be affected by the debt brake. The Bundestag could approve this plan shortly, which would underscore the urgency of both the national and EU-wide defense investment attempts. Member states will be able to significantly boost their defense expenditure without initiating the bloc's Excessive Deficit Procedure. Dr. Diana Galeeva However, the NATO expenditure target remains unclear, while it is somehow the critical point of the plan. Trump declared that NATO's European members should spend 5 percent of GDP on defense (none of the countries are currently spending this much). Meanwhile, NATO Secretary-General Mark Rutte has told member states they should reach 3 percent. Consequently, it requires time for further clarifications on how NATO will be involved in the plan. Another criticism of the plan is that the numbers are based on guesses. Furthermore, it is noted that the plan makes some controversial suggestions, including the right to enlarge national deficit levels and to move money around within EU accounts, rather than coming up with fresh money. Among other uncertainties, member states will also need to decide from which companies they will purchase weapons. Moreover, the question about the mechanisms under which the money will flow is important. The plan might involve loans from other funds. For example, the European Commission did not suggest redirecting the €93 billion of leftover money in the COVID-19 pandemic recovery fund. To sum up, the ReArm Europe plan involves the use of public funds, the introduction of a new funding mechanism and the application of the EU budget. However, the plan has already attracted concerns and remains littered with uncertainties. The question is whether Europe will effectively and swiftly implement the plan and how it will handle the Ukraine question in the near future. Clearly, the future of the European security landscape depends on how the plan is developed and implemented.
Yahoo
04-03-2025
- Business
- Yahoo
'Era of rearmament' as Europe turns on the defense spending taps
The European Union announced plans to boost defense spending amid rising security concerns on the continent. The plan follows reports that President Donald Trump has paused US military aid to Ukraine. The EU strategy includes loans and spending flexibility, but doesn't mention production capacity issues. The European Union unveiled a plan on Tuesday to boost member states' defense spending amid an "era of rearmament." The ReArm Europe plan could unlock 800 billion euros (about $840 billion) in funds, said European Commission president Ursula von der Leyen. The announcement followed reports late Monday that President Donald Trump had ordered a pause in US military aid to Ukraine after a fiery Oval Office meeting with President Volodymyr Zelenskyy. European leaders met in London on Sunday for an emergency summit on Ukraine. Many defense commentators believe it will be difficult for European states to fill the US-sized gap in military support. The EU plan focuses on ways to help member states unlock funding for defense spending, for both the "immediate" defense of Ukraine and in the long term, von der Leyen said. They include suspending the Excessive Deficit Procedure — a mechanism that normally prevents member states from going into major deficits. Low-cost loans worth 150 billion euros will be available to let governments "pool demand" and jointly purchase air and missile defense and artillery systems, missiles and ammunition drones and anti-drone systems, as well as cyber capabilities. "The question is no longer whether Europe's security is threatened in a very real way, or whether Europe should shoulder more of the responsibility for its own security," von der Leyen said. "In truth, we have long known the answers to those questions." The plans did not address the EU's defense production capacity, or the question of seizing frozen Russian assets worth more than $200 billion. Some European leaders are warming to the idea to help defend Ukraine. Read the original article on Business Insider
Euronews
16-02-2025
- Business
- Euronews
Munich Security Conference: Here are the 7 quotes you need to remember
Global leaders, ministers and other key policymakers descended on Munich over the weekend to discuss the main challenges facing the world, with Ukraine and the possible launch of peace negotiations with Russia topping the agenda. The must-watch speeches, delivered by Ukrainian President Volodymyr Zelenskyy, European Commission President Ursula von der Leyen, and the new US Vice-President JD Vance, starkly exposed how disconnected the two sides of the Atlantic are becoming over their assessments of the threats ahead. Euronews listened to it all to bring you the seven quotes that need to be remembered from the annual three-day gathering. 'A bold new approach': Ursula von der Leyen 'I can announce that I will propose to activate the escape clause for defence investments. This will allow member states to substantially increase their defence expenditure,' European Commission President Ursula von der Leyen said on Friday. Context: EU member states need to invest €500 billion in defence over the coming decade and leaders are struggling to agree on common instruments. The fiscal rule relaxation was already tipped as a potential solution earlier this month by EU leaders following an informal retreat on defence. It would enable member states with little fiscal wriggle room to boost defence spending without falling foul of EU rules and becoming the target of an Excessive Deficit Procedure that can lead to fines. Eight member states are currently targeted by such a procedure. Von der Leyen told the conference the measure would be part of a 'bold new approach', because 'when it comes to European security, Europe has to do more. Europe must bring more to the table'. Europe retreating from its fundamental values: JD Vance 'The threat that I worry the most about vis-a-vis Europe is not Russia, it's not China, it's not any other external actor. And what I worry about is the threat from within: the retreat of Europe from some of its most fundamental values, values shared with the United States of America,' the US Vice-President said on Friday. Context: Europe was hoping Vance would provide some clarity on the US administration's strategy for peace talks with Russia, following comments earlier in the week by Donald Trump and Pete Hegseth. A statement from the US President implied Europe, and Ukraine, could be excluded from negotiations with Russia, while the Defence Secretary said t hat it is "unrealistic" for Ukraine to believe it will become a member of Ukraine or that it would return to its pre-2014 borders. But Vance made just a passing reference to Ukraine and instead dedicated his 10-minute keynote speech to excoriating Europe for allegedly backsliding on democratic values and not listening to its voters. NATO membership not off the table for Ukraine: Rutte 'This is not about the peace deal. Some think it has to be part of a peace deal, but it's not part of the outcome. We have to take it step by step, have to make sure the deal ensures Putin will not try again,' Mark Rutte, NATO's Secretary General, told reporters on Friday. Context: Hegseth's statement at the NATO ministerial meeting in Brussels earlier in the week appeared to imply that Ukraine might be forced to give up on its aspiration to join the military alliance as part of peace negotiations with Russia to end the war. This is despite the fact allies said last year following a summit in Washington that Ukraine was on an "irreversible path' to membership. Rutte, however, refuted that NATO membership would be linked to peace talks. Let's create the 'armed forces of Europe': Zelenskyy "We must build the Armed Forces of Europe so that Europe's future depends only on Europeans and decisions about Europe are made in Europe," Zelenskyy said in a combative speech on Saturday. Context: Trump's announcement he had held a lengthy phone call with Vladimir Putin without consulting Ukraine first, Washington's repeated calls that Europe takes more responsibility for its own security and its foreign policy shift towards the Indo-Pacific coupled with warnings from intelligence agencies that Russia could have the means to attack a European NATO ally by 2030 is accelerating discussions about European own deterrence and capabilities. 'Let's be clear, we cannot rule out the possibility that America may refuse to cooperate with Europe on issues that threaten it,' Zelenskyy said, adding that 'Ukraine will never accept deals behind our backs without our involvement, and the same rule should apply to all of Europe.' I will restore Germany's EU leadership: Merz ''I'm hearing from the one-on-ones and the meetings here at the conference that there is a lack of German leadership within the European Union, and I fully agree with those who are demanding leadership from Germany, and frankly I'm willing to do that because I'm seeing that Germany is in a strategic position at the centre of Europe; that so many things in Europe depends on Germany,' Friedrich Merz told a panel discussion on Saturday. Context: The leader of the conservative Christian Democratic Union (CDU) is widely tipped to be the next German Chancellor following elections to be held on February 23. The country's election was pulled forward following the collapse of Olaf Scholz's three party coalition that had been characterised by bitter infighting over a number of policy areas. The quarrelling, coupled with Germany's economic woes, had weakened Berlin's voice at the European level. US-Ukraine rare earths' deal 'nightmare' for Putin: Graham 'If this minerals agreement happens, it's a nightmare for Putin cause we have something to defend that we didn't have before. So you better be pulling for this mineral agreement,' US Senator Lindsey Graham said during a panel on Saturday. Context: In an interview earlier this week, Trump appeared to suggest continued US military support for Ukraine could be conditional on a $500 billion deal over critical raw materials which are used in a wide array of everyday and high-tech appliances, including military equipment. China controls significant shares of the global mining and processing of a number of these materials including lithium, gallium and germanium. 'I told President Trump, it may be the old Soviet Union, maybe the Russian empire, but I do know he (Russian President Vladimir Putin) is going after the money. Don't let him steal what Ukraine has to enrich itself,' Graham said He added that with the deal 'President Trump can go to the American people and say that Ukraine is not a burden, it's a benefit. They're sitting on top of trillions of dollars worth of minerals that all of us can benefit from by aligning with the West.' Europe likely won't be at the pace talks: Kellogg 'You can have the Ukrainians, the Russians, and clearly the Americans at the table talking,' Keith Kellogg, Trump's special envoy on Ukraine and Russia said Saturday. Context: European leaders and Ukraine's Volodymyr Zelenskyy have for months said that any peace talks with Russia would have to involve them as any deal would impact the security of the whole continent. But Trump's call with Putin suggested both sides might be excluded, sparking a diplomatic flurry over the past week between European capitals and Kyiv. Pressed on Europe's participation, Kellogg said: 'I'm a school of realism. I think that's not going to happen'. He added that the 'European alliance' would however 'be critical' to ensure Ukrainian sovereignty.
