30 May 2013

EU states given extra time to reduce debt

10:58 am on 30 May 2013

The European Union has granted six member states more time to reduce their budget deficits.

The concession applies to France, the Netherlands, Poland, Portugal, Slovenia and Spain.

France will get two more years to bring its budget deficit below 3% of GDP, the BBC reports.

Spain, Poland and Slovenia will also get two more years to bring down their budget deficits though spending cuts and tax increases.

The Netherlands and Portugal are having their timetables extended by one year.

Even Europe's stronger economies, including Germany, are being urged to allow wage increases and increase flexibility in the jobs market to improve competitiveness.

Europe remains broadly in recession. The 17-member eurozone shrank by 0.2% in the first three months of the year, and is expected to register negative growth for 2013 as a whole.