8 EU member states warned over excessive deficit

This morning's top world news, in a nutshell - Thursday, 20th June 2024.

The European Commission has formally warned eight European Union member states over their excessive budget deficits. The countries are Belgium, France, Italy, Hungary, Malta, Poland, Slovakia, and Romania, the latter nation being also accused of having failed to heed previous warnings. Analysts said it was a step widely anticipated by many, which, however, will only result in a formal recommendation on the amount of adjustment required in November.
With the Stability Pact revised and now back in force, it marks the start of a new cycle of attention on public finances. “We must not confuse caution in spending with austerity,” warned Economy Commissioner Paolo Gentiloni. “Caution in spending is necessary in countries with high debt and very high deficits.”


The report on the Commission’s deficit procedure will now go to the Economic and Financial Committee, in July there will be the Commission’s proposal to the Council, then to be examined by Ecofin. Only in November, with the autumn package, and together with the opinion on the budget plan (to be presented by October 15), will the Commission make the proposal on the recommendation to the Council (at the Ecofin in December) concretely asking to intervene on the accounts: unique in the European semester, linked to the transition to the new Pact
The real turning point for the public finances seen by the EU will in fact already be tomorrow, Friday June 21, when the community executive will give the new ‘reference trajectories’, to bring back, in addition to the deficit, above all the debt (this is foreseen in the ‘preventive arm’ of the new Pact, while the deficit correction is in the ‘corrective arm’).


The figure will not be announced in theory until November, when the countries will have to present a proposal on four- or seven-year spending plans.


EU member states are required to keep their annual deficit below three per cent of GDP and a debt-to-GDP ratio of 60 per cent or less.


Separately, the European Commission also reiterated its call for Malta to wind down its energy subsidies as well as take other measures to tackle a severe shortage and mismatch of skills, ease traffic congestion, and increase renewable energy. The Commission noted that Malta’s general government deficit decreased from a deficit of 5.5 per cent of GDP in 2022 to a deficit of 4.9 per cent in 2023, while the general government debt fell from 51.6 per cent of GDP at the end of 2022 to 50.4 per cent at the end of 2023. According to the fiscal policy guidance for 2024, the Commission is taking the first step for the opening of deficit-based excessive deficit procedures on the basis of the 2023 data.


In its reaction, the Maltese government noted that the European Commission had observed that Malta’s economy would continue to outperform other member states in 2024 and 2025. This growth is expected to be driven by net exports and private consumption. “Similarly, the fact that the rate of inflation is projected to be halved by 2025 confirms that the government’s policies to promote price stability when it comes to basic necessities are bearing the desired results.” The government reiterated that the deficit will narrow by 0.5 per cent annually, ensuring it falls below three per cent over the next four years. It said it remained committed to effectively implement the Recovery and Resilience Plan, including the REPowerEU Chapter, and the Cohesion policy programmes. The implementation of this plan will tackle areas addressing the green and digital elements, as well as reforms in other sectors.


In a statement, the Opposition Nationalist Party said “the debt, which exceeds €10 billion and accrues nearly €600,000 in daily interests, is alarming and unsustainable.” The last time Malta faced an excessive deficit procedure was in 2012, when a Nationalist government was forced to make spending cuts to the tune of 0.59 per cent of GDP to meet deficit projections.


EPP nominates Metsola to again be EP President
The President of the European Parliament Roberta Metsola has been officially nominated as the EPP Group’s candidate to again head the European Parliament. The nomination was confirmed after a vote of approval by EPP MEPs in a closed meeting on Wednesday. Metsola received unanimous support.


In her acceptance speech to the EPP’s 188 MEPs, Metsola said, “Running to be your candidate for re-election as President of the European Parliament is a responsibility that I take seriously; that I understand is a decision that weighs heavily on all of us… I will not let you down.”


‘There’s no magic wand to fix all the country’s problems’ – Starmer
There’s no “magic wand” that can “fix all the country’s problems” if Labour wins the election, Sir Keir Starmer has told ITV. In an exclusive interview for ITV’s Peston programme, the Labour leader said: “I know what austerity feels like… but in the end, there’s no magic wand that we can wave the day after the election and fix all the country’s problems. And nobody would believe us if we said there is.”


Speaking during a visit to a Morrison’s supermarket in Swindon, Starmer said “what we can have is a serious plan for growth – and we can start that on day one.”


Starmer also told ITV’s Political Editor Robert Peston he was different to previous Labour leaders because he won’t pull the “tax lever”.


“I know traditionally Labour leaders might have said, ‘it’s the tax lever I can’t wait to get my hands on’. That’s not the case as far as I’m concerned because all of my focus is on growing our economy”.


Starmer said the country needed to “break out” of the cycle of raising money through taxes and spending cuts: “If all you do is tax the existing pie or cut the spending of the existing pie, which is ever reducing, you are going round and round in circles, [you] have to break out of it.”


Israel may have violated laws of war in Gaza – UN
Israeli forces may have repeatedly violated the laws of war and failed to distinguish between civilians and fighters in the Gaza conflict, the UN human rights office said on Wednesday.


Separately, the head of a UN inquiry accused the Israeli military of carrying out an “extermination” of Palestinians. In a report on six deadly Israeli attacks, the UN human rights office (OHCHR) said Israeli forces “may have systematically violated the principles of distinction, proportionality, and precautions in attack”.


“The requirement to select means and methods of warfare that avoid or at the very least minimise to every extent civilian harm appears to have been consistently violated in Israel’s bombing campaign,” UN High Commissioner for Human Rights Volker Turk said.


Israel’s permanent mission to the United Nations in Geneva characterised the analysis as “factually, legally, and methodologically flawed”. “Since the OHCHR has, at best, a partial factual picture, any attempt to reach legal conclusions is inherently flawed,” it said.


In a separate meeting of the UN Human Rights Council in Geneva, the head of a UN Commission of Inquiry, Navi Pillay, said perpetrators of abuses in the conflict must be brought to account.


Hezbollah chief threatens Israel, Cyprus if Gaza war spills over
The head of Lebanon’s Hezbollah said on Wednesday that nowhere in Israel would be safe if a full-fledged war breaks out between the two foes, and also threatened EU member Cyprus for the first time and other parts of the Mediterranean.


Hezbollah has been trading fire with Israel for more than eight months in parallel with the Gaza war. On Tuesday, the Iran-backed group published what it said was drone footage of sensitive military sites deep in Israeli territory.
France 24 quotes Hezbollah chief Sayyed Hassan Nasrallah saying in a televised address on Wednesday, “there will be no place safe from our missiles and our drones” in Israel in the event of a broader war. The group also had “a bank of targets” that it could target in precision strikes, he said.


Israel “knows that what also awaits it in the Mediterranean is very big … In the face of a battle of this magnitude, it knows that it must now wait for us on land, in the air, and at sea,” Nasrallah added.


Israeli Foreign Minister Israel Katz had warned on Tuesday that a decision on an all-out war with Hezbollah was coming soon and Israel’s military said “operational plans for an offensive in Lebanon were approved and validated”.
Nasrallah also threatened Cyprus – the EU member state in closest proximity to Lebanon, with which it has cordial relations – accusing it of allowing Israel to use its airports and bases for military exercises. “The Cypriot government must be warned that opening Cypriot airports and bases for the Israeli enemy to target Lebanon means that the Cypriot government has become part of the war and the resistance (Hezbollah) will deal with it as part of the war,” Nasrallah said. Cypriot President Nikos Christodoulides denied any suggestion Cyprus was taking sides in any conflict.


Canada lists Iran Revolutionary Guards as ‘terrorist’ group
Canada has listed Iran’s Islamic Revolutionary Guard Corps (IRGC) as a “terrorist” entity and urged its citizens in Iran to leave. The Canadian government made the announcement on Wednesday, saying that the move will help Ottawa with “countering terrorist financing”.


“The decision to list the IRGC through the Criminal Code listing regime sends a strong message that Canada will use all tools at its disposal to combat the terrorist activity of the IRGC, conducted both unilaterally and in knowing association with listed terrorist entities such as Hezbollah and Hamas,” the Canadian government said in a statement.


There was no immediate comment from Tehran.


Louisiana now requires Ten Commandments displayed in classrooms
The governor of Louisiana signed a Bill Wednesday requiring the Ten Commandments be displayed in every public school classroom in the conservative US state, reigniting the debate over separation of church and state. The legislation, the first of its kind in the US, mandates that the biblical text be on display starting in 2025 in all public school classrooms from kindergarten through state-funded universities.


“If you want to respect the rule of law, you gotta start from the original law given – which was Moses,” Jeff Landry, Republican governor of the southern state, said at the Bill’s signing ceremony.


Opponents questioned the law’s constitutionality and vowed to challenge it in court.


Putin arrives in Vietnam for state visit
Russian President Vladimir Putin arrived in Vietnam early today for talks with the country’s leaders after concluding a defence pact with North Korea for his final stop on a two-nation tour of Asia.


Putin’s aircraft touched down at Hanoi’s international airport, where he was met on a red carpet by Vietnamese Deputy Prime Minister Tran Hong Ha, according to Reuters.


In an opinion piece timed for his visit, Putin applauded the country for supporting “a pragmatic way to solve the crisis” in Ukraine, in comments published in Vietnam’s Communist Party newspaper.


Russia, N. Korea strengthen alliance with new defence agreement
Meanwhile, President Putin and North Korean leader Kim Jong Un signed a mutual defence assistance pact on Wednesday during Putin’s visit to Pyongyang since 2000.


According to a statement from the Russian government, the Treaty on Comprehensive Strategic Partnership stipulates “mutual assistance in the event of aggression against one of the parties.” Putin characterised the deal as a “breakthrough document”, reflecting the desire to elevate relations to a “new qualitative level”.


He further criticised the US’s “confrontational policy” in the region, which he says is “accompanied by a substantial increase in the scope and intensity of various military exercises involving the Republic of Korea and Japan, which have a hostile nature towards the DPRK [the Democratic People’s Republic of Korea, commonly known as North Korea].”


While the full scope of the new pact remains undisclosed, the deepening military ties between Russia and North Korea have raised concerns among Western nations about the potential implications for regional security and ongoing conflicts.


As tensions escalate on the Korean Peninsula, NATO Secretary General Jens Stoltenberg warned that Russia’s war in Ukraine is “propped up” by countries like North Korea, cautioning, “If they succeed in Ukraine, it will make us more vulnerable and the world more dangerous.”


The US Department of State previously issued a statement in January condemning North Korea’s export and Russia’s procurement of ballistic missiles as a “flagrant violation” of UN Security Council resolutions.


Climate protesters spray Stonehenge orange
Environmental activists sprayed orange powder paint on southern England’s ancient Stonehenge monument Wednesday, just a day before thousands of visitors were expected to visit the structure to celebrate the summer solstice.


British climate activist group ‘Just Stop Oi’ posted a video on X showing two members using fire extinguishers to douse at least three of the some 5,000-year-old standing stones with the orange substance as someone tried to pull them back.


Wiltshire Police said they arrested the two protesters “on suspicion of damaging the ancient monument”. In another post on X, Just Stop Oil assured that the paint they used wasn’t permanent. “The paint is made of cornstarch, which will wash away in the rain, but the urgent need for effective government action to mitigate the catastrophic consequences of the climate and ecological crisis will not,” the post read.


UEFA Euro 2024: Germany beat Hungary to qualify for last 16
Germany sealed qualification for the knockout stage of their home Euros, after a 2-0 win over Hungary in Group A. Jamal Musiala scored again as he returned to Stuttgart, where he was born. Other Wednesday results were: Scotland v Switzerland 1-1 and in Group B: Cvroatia v Albania 2-2. Today’s prgramme: Group C: Slovenia v Serbia (3pm) and Denmark v England (6pm). Also, in Group B: Spain v. Italy (9pm).

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