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Europe may need to debate softer budget rules - Slovak PM

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(Globalpost/GlobalPost)

PRAGUE (Reuters) - The European Union may need to debate easing rules on the pace of budget consolidation for all its members if countries like France and Spain ask for leniency on their targets, Slovak Prime Minister Robert Fico said on Wednesday.

Budget cuts have been at the centre of Europe's strategy to overcome a three-year debt crisis, but they are also blamed for a damaging cycle where governments cut back, companies lay off staff, Europeans buy less and young people have little hope of finding a job.

Fico said his government was ready to squash the deficit to 3 percent of gross domestic product this year as planned - unlike France, which has admitted it would slip and is battling to convince its EU partners to give it more time.

"It is possible that the May (EU) summit will be very heated," Fico told a news conference broadcast on live TV.

"If these countries ask for exceptions, it will be necessary, also with regards to comments by the International Monetary Fund and the European Commission chief, to talk about new rules for the pace of fiscal consolidation."

Fico said that he agreed that the economic crisis could not be overcome by cuts alone but that the same rules must apply to all and no country should be given special treatment.

"Easing the pace for 2014 and further years is a topic we want to participate on, but only under the condition that such easing concerns all member countries," he said.

European Commission President Jose Manuel Barroso said last weekend that austerity had "reached its limits", earning criticism from Germany.

Slovakia aims to cut its budget gap to 2.9 percent this year from 4.4 percent in 2012, and further narrow the gap to 2.6 percent in 2014 and 2.0 percent in 2015.

(Reporting by Jan Lopatka; Editing by Michael Winfrey)

http://www.globalpost.com/dispatch/news/thomson-reuters/130424/europe-may-need-debate-softer-budget-rules-slovak-pm