EU faces hypocrisy charge over budget rules
BRUSSELS THE European Union risked accusations of applying double standards on budget rules on Tuesday, with Hungary facing financial penalties but after Spain obtained a concession on its public deficit.
The government in Budapest was braced for a decision at EU finance ministers’ talks in Brussels which would result in nearly 500 million euros’ worth of EU grants next year being frozen over problems in the accounts for Hungarian public spending last year. The looming decision followed a recommendation by Brussels watchdogs that Hungary be deprived of that income unless corrections were made.
But talks between eurozoneonly ministers late on Monday gave the Spanish government extra space to cut its overshooting public deficit.
Spain has the fourth-biggest economy in the European Union but is in deep recession with high unemployment following a property crash.
“We did not deploy sanctions directly on Spain,” said Austrian Finance Minister Maria Fekter, who had urged partners on Monday to take a “severe” stance on Spain’s demand for wriggle-room.
“Given the pressure on Hungary, I have the impression that there are double standards” at play, she underlined, adding that Vienna “would have preferred to give Hungary more time to adjust.
Europe “has to make sure that the rules we gave ourselves will be followed” and that “we have to treat all states the same way,” she said.
That meant offering Hungary time before taking “the final decision about sanctions at the beginning of the summer.” The EU, shaken by the Greek debt crisis, has made clear in the past year that it intends to tighten laws and procedures to discipline public finances. The European Commission denied double standards were at work.
Hungary is not in the eurozone, and its deadline to return within the EU’s longstanding ceiling for an annual public deficit — 3.0 percent of gross domestic product — is 2012, whereas Spain has to meet that target in 2013.