IMF pushes EU to simplify 'complicated' budget rules
The European Union must find ways to simplify its "excessively complicated" budget rules that are rarely met by struggling economies and discourage investment, the IMF said on Thursday.
Luxembourg: The European Union must find ways to simplify its "excessively complicated" budget rules that are rarely met by struggling economies and discourage investment, the IMF said on Thursday.
The criticism, made in an IMF report on the state of the eurozone economy, comes amid a renewed debate over the EU`s Stability Pact, a strict set of fiscal rules requiring member states to keep their deficits in check.
Earlier this week, Germany`s economy minister suggested more latitude could be beneficial for countries at pains to meet the pact`s rules, but the idea was swiftly swept aside by Chancellor Angela Merkel.
In the report, which was presented in Luxembourg to eurozone ministers by IMF head Christine Lagarde, the fund warned that the pact "has become excessively complicated with multiple objectives and targets."
"Compliance with fiscal targets has been poor, reflecting in part weak enforcement mechanisms. And there is a worry that the framework discourages public investment," it said.
"There are no easy solutions to these problems," the IMF added.
Arriving to the meeting, finance ministers from France and Italy denied any intention of calling for changes in the pact, despite widespread praise for the idea by officials in Paris and Rome.
Overall, the IMF said that while recovery in the eurozone is "taking hold" it was "neither robust or nor sufficiently strong" with unemployment still high and inflation "worryingly low".