MidnightCall Magazine
News From Israel MagazineBrussels Cautions UK Over Deficit
Brussels put the UK’s finances under closer scrutiny as the government deficit is likely to breach European Union guidelines.
“The UK’s budgetary position has deteriorated over the past year and is expected to rise above the 3 percent of GDP reference value in the financial year ending March 2009,” said Joaquin Almunia, EU commissioner for economic and monetary affairs. “The Commission has therefore initiated the excessive deficit procedure.”
“Having examined the budgetary developments as well as the short-and medium-term economic prospects and the policy action taken by the UK government, the Commission concludes that the planned excess of the deficit over the reference value cannot be considered exceptional or temporary and suggests that the UK is not respecting the deficit criterion set in the [EU] treaty,” it said.
Under EU rules Brussels is required to monitor member states to ensure they do not run excessive deficits – defined as being in excess of 3 percent of GDP. If a country breaches that level, the “excessive deficit procedure” can be invoked.
-Financial Times, 12 June 2008, pg. 4
No nation can operate independently; the UK is obligated to follow the budgetary guidelines issued by the EU. Although it seems relatively insignificant, it is nevertheless a beginning of the end for a nation to act sovereignly with its own finances.
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