For first time, eurozone ministers are asked to justify spending plans to each other

BRUSSELS – Finance ministers from nations using the euro currency met Friday for the first time to critique each other’s spending plans for next year.

The gathering in Brussels was supposed to help reduce the chances for a repeat of the government overspending and miscalculation that plunged much of Europe’s economy into recession. European Commissioner Olli Rehn said over-optimistic economic forecasting has been a “major vice” plaguing European governments in the past.

At their closed-door meeting, the finance ministers addressed criticisms that the European Union’s executive branch issued last week of each country’s proposed 2014 budget. Jeroen Dijsselbloem of the Netherlands, who chaired the session, told a news conference afterward that the discussions among colleagues had been respectful but “direct.”

In a communique, the ministers said five countries whose 2014 budgets were deemed at risk of not complying with EU growth and stability rules —Malta, Spain, Italy, Finland and Luxembourg — expressed their “full commitment” Friday to make the needed adjustments, or said they have already begun to do so.

Government deficits in the 17-nation currency zone, which averaged close to 3 per cent of Gross Domestic Product this year, are expected to fall below that benchmark next year, the ministers said. “With that, both the debt and deficit projections for the euro area are considerably more positive than for other major economies, including the United States and Japan,” they said.

“All member states concerned are taking seriously their commitment to sound public financing,” Rehn said. He termed Friday’s meeting a “significant milestone” in improving the economic governance of the countries using the euro.

Dijsselbloem, however, said growth in the eurozone remains too weak and fragile.

“If we want to strengthen it, we will have to push forward on our reform agenda,” the Dutch finance minister said.