Tag Archives: public debt

Excessive Deficit May Prompt Suspension of Regional Aid?

The European Commission considers suspending structural funds for states which are regularly in breach of the EU’s stability and growth pact. An additional criterion being considered is a public debt ratio above 60% of GDP. The Commission also plans to deepen and broaden budgetary surveillance in the future.

I can follow the logic of the Commission in desiring to impose a budget discipline in the EU, but I am particularly worried about Bulgaria. As we already know, there probably will be an excessive deficit procedure against Bulgaria for 2009 and possibly for 2010. True, the gross public debt is relatively small. But even now we face substantial problems in using the structural funds. Any further restriction or suspension of regional aid by the Commission can be devastating for a country that simply is not competitive enough on the EU markets.

Greece, Goldman Sachs Will Be Investigated over Credit Swaps

To my satisfaction both the Federal Reserve of the US and the European Commission are looking into the role of Goldman Sachs in providing help to the Greek government in order to hide an additional 1 billion US dollars in debt by currency swaps.