EU warns Germany over progress of reforms : Report

By MarketWatch - BRUSSELS

Germany has not heeded the European Commission's recommendations to correct its structural imbalances, the European Union's economics division said in a report
While giving Europe's biggest economy a green light on its 2014 budget, the EU executive said its new government should submit an updated one
The European Commission made the observation as part of its first-ever budget-surveillance exercise
Having reviewed EU member-state budget plans for next year, the commission assessed them based on whether they meet preset fiscal targets
The outcomes of the scrutiny will be discussed by finance ministers at a special meeting Nov. 22 in Brussels
France, the EU's second-biggest economy, which had been on the commission's budget watchlist, was cleared
But the commission noted France's 2014 budget leaves "no margin" for deviation and that it "constitutes limited progress' in addressing structural fiscal recommendations
Italy's budget for next year is at risk of missing the agreed debt target, the commission said, calling on the Italian authorities to "take the necessary measures' to correct this
But the government in Rome will not be able to use the so-called "investment clause," which exempts public funds directed to investments from a country's fiscal performance if its deficit and debt are on a downward trajectory and within EU limits
The commission said Netherlands, Austria, Belgium, Spain, Estonia, Lithuania, Malta, Slovakia and Slovenia were within debt and deficit targets for 2013
But it warned that Finland, Malta, Luxembourg and Spain should review their 2014 budgets to ensure they'll meet next year's agreed targets