Finance minister calls for tougher eurozone budget deficit rules

Eurozone rules should be tightened up so that countries are only given more time to reduce their budget deficits to below 3% of GDP if they agree to make structural reforms to their economies, Dutch finance minister Jeroen Dijsselbloem said on Monday.

Dijsselbloem is also chairman of the Eurogroup of finance ministers and made the suggestion during a visit to Madrid.

‘The European budgetary rules allow for an extension in bad economic times,’ the Financial Times quoted Dijsselbloem as saying. ‘The leniency is now granted without any conditions. In future cases, I propose to link deviation of fiscal targets in the stability and growth pact to concrete achievement of reforms.’

The Netherlands itself is on target to break the 3% limit this year and in 2014. In May the European Commission gave the Netherlands until 2014 to get its budget deficit under control, a year past the original deadline.

European commissioner Olli Rehn said at the time the current deficit is due to the nationalisation of financial services group SNS Reaal and ‘economic conditions which are more serious than expected’.

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