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UK Slips Out of Tough EU Fiscal Rules

Service : Economy
TEHRAN, March 16 (ICANA) – British Chancellor George Osborne has successfully dodged a set of tough EU regulations introduced to ensure the bloc does not suffer another shock similar to the one from Greece.
Wednesday, March 16, 2011 1:48:58 PM
UK Slips Out of Tough EU Fiscal Rules

EU finance ministers approved the new rules for application in all the 27-member states but Osborne argued against Britain's obligation to follow the regulations, saying London is not bound by the current debt and deficit limit targets in the bloc, therefore the new safeguards do not apply to London either.

Under the new economic policy, EU nations within and outside the Eurozone should follow “numerical fiscal rules” to ensure their annual deficit level does not exceed 3 percent of GDP and their national debt does not rise above 60 percent of GDP.

The new regulations also set stricter punishments for Eurozone countries for failing to keep to the limits.

The legally-binding agreement says “the obligation to have in place numerical fiscal rules... should not apply to the UK."

Britain had an opt-out from the euro-related rules since EU nations agreed on the single currency deal at Maastricht some 20 years ago.

According to Treasury sources, the guarantee that “Europe's new budget rules do not bind the UK Government” was “exactly what we wanted”.

The British government has already set in place fiscal rules to eliminate the “current structural deficit” by March 2015 and to reverse the current rising trend of debt as a percentage of GDP by the end of this parliament.

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