BRUSSELS (Reuters) – The European Commission warned on Tuesday five EU states, including Italy and France, that they had excessive economic imbalances which weigh on their growth and need to be corrected.
The EU executive is in charge of monitoring public finances in the 28-nation bloc and of issuing warnings over potential bottlenecks in economies before the develop into crises.
Oversight procedures give the European Commission the power to reject national budgets and impose fines on countries that do not correct their imbalances, but so far the EU executive has refrained from pushing for sanctions.
This year’s monitoring showed that Italy, France, Portugal, Croatia and Bulgaria had excessive imbalances, mostly due to large debts, high unemployment rates and weak banking systems.
The five countries were singled out already in last year’s monitoring.
Another seven countries had regular imbalances, although deemed not excessive, the Commission said. They are Finland, Germany, Ireland, the Netherlands, Spain, Sweden and Slovenia.
Last year, 16 of the 28 EU countries had imbalances, while this year the number has dropped to 12 since Belgium, Hungary, Romania and Britain are no longer considered to need special monitoring.
The Commission’s analysis excluded Greece and Cyprus because they are monitored through separate bailout programmes.
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