EIM Member States – Budgets and Economics: March 2014

08 April 2014

The GCC's final ruling states that both the ESM and fiscal compact are constitutional. Concern about Italy and Spain (and partly Greece)'s ability to respond to adjustment process.

• The German Constitutional Court (GCC) delivered its final rulings on both the ESM and the fiscal compact – both treaties are constitutional. Germany – both Government and Bundesbank - also recognised the problems caused by its current account surplus, but without any specific commitments on what to do about it.

• Spain and Italy both give concern about their willingness and even ability to respond to the lengthy adjustment process that is still needed. Bruegel even discussed the potential need for Italy to lengthen its debt maturities.

• Finland is often cited as increasingly awkward about the EU but its Parliament adopted a report that underlined it EU commitment. 

• Greece appears to be about to get the next tranche of aid – supported by an improving economic picture but observers are noting the failure of the political system to implement adequate structural reform.

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© Graham Bishop