By Chris Jones - 11th January 2006
Tough economic reforms in the 1990s have made the Nordic countries’ economies the envy of Europe, Joaquin Almunia said on Wednesday.
The EU finance chief was speaking at the launch of the European Commission’s annual assessment of member states’ compliance with the 1997 stability and growth pact.
“We are very, very pleased with the progress of Finland, Denmark and Sweden,” he said.
“The way in which they have improved their public finances over the last few years is an excellent example to the rest of the EU.”
“The strong economic position of these three countries today is due in no small part to courageous economic reforms in the 1990s,” he said.
“They have managed to overhaul their economies and tackle the issue of ageing populations without reducing the level of social protection.”
“They are all showing budget surpluses, and they can face the future from a very positive position.”
Almunia also welcomed the progress made by Slovakia and the Czech Republic over the last year, although he called for more ambitious measures to keep finances under control.
Both countries had budget deficits in excess of the limit of 3 per cent of GDP set out in the stability and growth legislation when they joined the EU in 2004, but have made good progress towards cutting their debt levels.
“Although they are still in the excessive deficit procedure, these two countries have fared much better than had been expected in tackling the problem,” said Almunia.
He added that both were on track to meet the requirements for eurozone membership, planned for 2009-2010.
But he said that there was still room for further improvement.
“The Czechs in particular face difficult times ahead, with an ageing population increasing the pressure on the pension system.”
“The commission would like to see both countries do more to build on the momentum they already have to tackle further public finance issues.”
Hungary, meanwhile, has until September to provide more detailed information on its public finances to the commission.
“The information we have received from Hungary was not detailed enough for us to assess whether further measures are necessary to address the budget deficit,” Almunia said.
The commissioner said that Budapest had been granted extra time to provide the information because of upcoming elections in April.
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