The European Commission has applied very flexible financial rules, making it ineffective in reducing debt in heavily indebted countries such as Italy, in a move that could be offset by negative market reactions, as ECA said today.
To address the widespread concerns about the future of the euro, the European Union, led by Germany, tightened its financial rules during the peak of the European Union debt crisis in 2010-2012 and imposed targets for bold economic adjustment on member states, which has been criticized by many economists for the austerity resulting from it.
The European Court of Auditors (ECA) said today that these rules are applied excessive flexibility by the European Commission, and this excessive flexibility has prevented the achievement of financial goals.
Under EU fiscal rules, countries must aim to achieve a balanced structural budget and maintain a deficit of less than 3 percent of their GDP and a public debt of less than 60 percent, yet many have much higher public debt.
