Euro Zone; time to adjust the fiscal effort? - BNP

By FXstreet.com | July 11, 2014 AAA

FXStreet (Guatemala) - Analysts at BNP Paribas explained that several euro-zone governments–chief among them France and Italy–are calling for some relaxation of the European fiscal rules to bolster their growth outlook.



“In particular, they want to see certain categories of investment expenditure excluded from fiscal balance or effort calculations. Provided certain conditions are met, that could be highly beneficial”.



“For the time being, the response given by Member States opposed to this plan is that the European rules already possess sufficient flexibility”.



“Major changes should not be anticipated in the short term, even though the door has not been completely closed on the idea”.



“The European Council has asked the European Commission for a report by the end of the year on how the new rules of the Stability and Growth Pact are working”.



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