September 1, 2011 / 10:58 AM / 8 years ago

UPDATE 1-EU rejects report that it plans to warn Belgium

* EU Commission says not planning to warn Belgium

* Commission says has confidence in caretaker government

* Belgium faces tough economic choices as Germany slows

* Country struggles to form new government after over a year

(Updates with Commission rejection of report)

BRUSSELS, Sept 1 (Reuters) - The European Commission denied a newspaper report on Thursday that the EU planned to warn Belgium over its political impasse, adding it had full confidence in the country’s caretaker government.

“Contrary to what has been claimed in media reports today, there is no change in the Commission’s position,” Commission spokeswoman Pia Ahrenkilde Hansen told a daily news conference.

“The European Commission, as we have repeated on many occasions, has full confidence in the current caretaker government and that it will take the necessary decisions in the current context,” she said.

Belgian newspaper Le Soir said on Thursday that the Commission was due to issue the warning to Belgium when it released its September report on the financial situation of member states.

The Commission, the European Union’s executive body, said it was not planning to take any specific steps for Belgium.

A caretaker government has been in charge in Belgium for over a year because political parties have been unable to agree on the future of the linguistically divided country, with Dutch-speaking leaders wanting more powers for Flanders.

Belgium’s central bank forecast in the spring that the country’s national output would outstrip euro zone growth in 2011, as it benefited from growth in Germany, a key export market.

However, the newspaper said that, with business surveys now pointing to a slowdown in Germany , Belgium would need to take painful budget-cutting measures as its public debt is almost as large as its annual economic output.

“Belgium will need to take significant structural measures, which cannot be decided by a caretaker government,” Le Soir said, citing an EU source.

“It’s about reforms which should allow a resurgence of economic growth. That’s why the Commission now will now raise the tone,” Le Soir quoted the EU source as saying.

The European Commission will publish new 2011 forecasts for economic growth and inflation on September 15, including individual figures for economies of the seven largest members. (Reporting by Philip Blenkinsop, Ben Deighton and Robert-Jan Bartunek, editing by Rex Merrifield/Ruth Pitchford)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below