EU economic situation remains fragile: report

BRUSSELS. September 12. KAZINFORM The economic outlook of European Union (EU) countries would remain dim, according to the 2011 Report on Public Finance released on Monday by the European Commission.

"The overall economic situation remains fragile" while "in some countries the recovery is yet to be felt," said the report.

The report showed that the state debt to GDP ratio would continue to rise and would set to reach 83.3 percent of GDP in 2012, Kazinform reports referring to Xinhua.

In the already debt-ridden Greece, the debt would rise to 166.1 percent of the GDP, the highest in the region.

Marco Buti, Director-General for the Economic and Financial Affairs of the Commission, echoed last year's grave words in his editorial, underlining the issue of sustainability.

The relevant legislative pack, the Stability and Growth Pact (SGP), was to undergo some reform, said Buti. The SGP sets out the parameters within which EU countries should manage their public finance, with a focus of budgetary policy.

The reform would introduce an expenditure rule into the preventive arm of the Pact, and would make the debt criterion operational in the corrective arm, while introducing sanctions to the preventive arm for the first and intensifying those in the corrective arm, according to the report.

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