“Modifications of the (EU’s) Stability (and Growth) Pact’s rules are not necessary,” deputy finance minister Joerg Asmussen told the Financial Times Deutschland in an interview.
“The bugetary taps are not wide open forever,” he added.
With many European countries exceeding deficit limits laid down in the pact owing to stimulus packages aimed at fighting the economic crisis, French Finance Minister Christine Lagarde has called for a “specific analysis” of swelling budget deficits.
Under the pact’s rules, European Union countries are bound to maintain public deficits that do not exceed 3.0 percent of gross domestic product and are supposed to work towards a balance or even surplus in times of economic growth.
Public debt is not supposed to exceed 60 percent of GDP.
In 2005, terms of the pact were already eased, mainly at the demand of France and Germany, to account for exceptional pressures caused by economic downturns.
Governments are currently authorised to exceed “temporarily and exceptionally” the 3.0 percent deficit ceiling if they are caught in a recession, as is the case at present.
Authorities can also benefit from longer periods to correct the deficit, if the situation is justified.
These rules have been applied in recent months as lower tax receipts and higher spending to fight the crisis have pushed finances of major European economies well into the red.