Belgium, four other nations face Europe fines on deficits

WASHINGTON - Agence France-Presse

Belgium PM Yues Leterme. AFP photo

Belgium was handed an urgent warning from Brussels yesterday to get its public finances back on track and deliver a 2012 budget cutting its deficit by the middle of next month.

Econonic Affairs Commissioner Olli Rehn singled out Belgium along with Cyprus, Hungary, Malta and Poland as five EU states at risk of missing a previously agreed 2012 deadline to return their annual deficits to under three percent of GDP -- a threshold enshrined in EU law.

“Very clearly Belgium needs to step up efforts to meet fiscal targets for next year,” Rehn said. “Convincing revisions of permanent fiscal measures and 2012 budgets should be available by mid-December,” he added

The commission as of next month will be able to resort to a so-called “six-pack” of new laws to sanction Belgium if its incoming government fails to meet the targets.

Rehn said he issued finance ministers from the five countries with “an early warning” during talks in Brussels earlier this week and was “sending letters to the five countries today.”

He said Belgium was off-target this year and that next year -- the “deadline for correcting its deficit” -- would see a projected figure of 4.5 percent.

Detailed forecasts for the whole of Europe showed that Belgium’s economy is now expected to grow by 0.9 percent next year, as against the 2.2 percent previously predicted by the EU six months ago.

Poland, which has long argued its deficit figures are inflated by the need to meet EU standards on pensions, is again tipped to be one of the bloc’s best performers with growth of 2.5 percent.