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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: smolejv@gmx.net who wrote (20065)	6/20/2002 1:40:21 PM
From: marek_wojna	Read Replies (1) \| Respond to of 74559

I guess Europe might be for some tough times. Enjoy your storm, must be a real relief in this heat wave you guys experiencing lately. <<Thursday June 20, 1:31 pm Eastern Time Associated Press French Want EU Budget Rules Relaxed By PAUL GEITNER AP Business Writer French Push for Relaxation of European Union Budgetary Rules BRUSSELS, Belgium (AP) -- Just months after the European Union chastised Germany for its burgeoning budget deficit, France was facing similar pressure Thursday. Meeting just ahead of an EU summit, finance ministers were considering whether to give France's new center-right government some breathing room over its deficit, or insist on strict adherence to rules meant to underpin the euro's stability. ADVERTISEMENT French President Jacques Chirac has suggested pushing the 2004 target date for a balanced budget to 2007 to help him meet campaign promises to slash taxes and increase public spending. Other EU countries facing tight budgets -- notably Germany, Italy and Portugal -- have all renewed their pledge to stick to the rules and are loathe to let France off the hook. Compromises being considered include calling for budgets to be in balance or "close to balance" by 2004, or linking the target date to good economic growth. Despite days of tough bargaining, an EU official said the final decision would probably fall to the leaders, who meet Friday and Saturday in Seville, Spain. Analysts, however, say the crucial factor is not the target date but another rule that caps allowable deficits at 3 percent of gross domestic product. France's debt is expected to balloon to 2.6 percent of GDP this year due to slower than expected growth, but that is still well under the limit. "The whole concept of moving toward a balanced budget is important, but whether it's 2004 or 2005 or 2007 doesn't really matter," said Ed Teather, European economist at UBS Warburg. "The 3 percent target is viewed as very much more important and sacrosanct." Markets have already accounted for some "slippage," he added, especially after Germany, which insisted on the rules in the first place, was embarrassed to become the first to nearly violate them. Berlin narrowly averted an official reprimand in February when its budget deficit approached 2.7 percent.