Is double standards measured in Europe? At first glance, it looks like it. Because if Italy wants to make debts, the indignation is great. In France, on the other hand, everything stays quiet. Is Brussels beating both eyes because President Emmanuel Macron, unlike the Italian Government, is a great friend of Europe?
It’s not that easy. There are fixed rules for all euro countries. This is the so-called Growth and Stability Pact. There are two important rules in it. First, if a government spends more than it takes, then the so-called deficit, meaning the budget hole, can not exceed three percent of the country’s total economic output. In Italy it should be 2.4 percent, in France it could be just over three percent because of the expensive promises of Macron. Actually a clear thing. Italy is fine, and France is not.
Italy’s debt is 2.3 trillion euros
But there is also the second rule. The says that the total debt must not be higher than 60 percent of the economic power – and it looks bleak in Italy. The country sits on a gigantic debt mountain of nearly 2.3 trillion euros, a number with twelve zeros. This corresponds to a rate of 132 percent. Only Greece has more. In France, it is currently 97 percent. Also too much, but not so threatening. In addition, the French economy is growing faster than the Italian. And: Italy has violated the euro rules since 2016.
Debt is a temporary problem
France, on the other hand, complied with all requirements in the past year – for the first time since 2007. In addition, the EU has some room for maneuver in its assessment. Debt countries that are credible in tackling reforms and putting money into jobs and investments are more likely to get away with it.
As far as France is concerned, the responsible budgetary Commissioner, Pierre Moscovici, who himself is a Frenchman, says that the new debt is a temporary problem and can therefore be tolerated.
Stephan Ueberbach, ARD Studio Brussels
