Spain and Italy Warned Over Budget Plans

The European Commission is warning the Spanish and Italian governments that their draft budgets for 2014 do not comply with new debt and deficit rules. The Commission also said that France and the Netherlands barely qualified for the new standards.

According to the European Union’s charter, countries that do not comply will likely have to revise their tax and spending plans before they can be submitted to national parliaments. The warning marks the first time the EC has taken this step.

Eurozone members states are required to cut deficits until they reach a balanced budget. They also have to reduce levels of public debt. The Commission usually gives countries flexibility if their deficit is below the EU ceiling of 3% of the nation’s gross domestic product.

The Commission said that France, while just below the 3% threshold, was making only “limited progress” in reforms.

The Eurozone economy grew by .1% from July to September in data released Thursday, down from .3% growth in the previous quarter.

IMF Calls For New Action Against Eurozone Crisis

The ongoing crisis in the Eurozone has led the International Monetary Fund to call for more action to help increase bank lending.

The IMF commended steps taken by European leaders to stabilize financial markets and said their actions decreased the likelihood of a breakup of the Euro. However, the IMF report said that further cuts to interest rates by the European Central Bank would be needed to boost growth. Continue reading

Portugal At Risk For Second EU Bailout

Portugal’s prime minister is warning that unless deep cuts are made to social security, health, education and public programs the nation could be facing a second bailout from the European Union.

Prime Minister Pedro Passos Coelho said the country is facing a “national emergency” and that because the Portuguese Constitutional Court struck down 1 billion euros in savings that were required to meet existing bailout conditions there was no choice but to cut in areas like welfare. Continue reading

Cyprus Government Starts Emergency Efforts

Eurozone finance ministers were holding unscheduled meetings trying to find a “plan B” for Cyprus as the country’s financial system is rapidly collapsing beyond their control.

The country’s banks have been shut until next week because of a run on savings accounts. Rumors that the European Union and the International Monetary Fund would require all Cyprus account holders to sacrifice a portion of their savings to obtain a bailout of the nation. Continue reading