Eurozone budget improvements grinding to a halt, ECB says

0 Comments | AFP, April, 2008

FRANKFURT (AFP) — France and Italy will likely stop making progress towards establishing sound finances, the European Central Bank said Monday as it complained that eurozone fiscal consolidation would come to a standstill this year.

Budget plans for 2008 "indicate that the decline in the average government deficit in the euro area, observed since 2004, will come to a halt," the ECB said in its annual report for 2007.

"The near stabilisation of the euro area average deficit reflects a slowdown or even a reversal of consolidation efforts in some countries and a reduction of surpluses in others," it added.

"In more detail, no substantial consolidation progress towards sound public finances is expected in France and Italy," which would leave their deficits, like...