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EU lifts Britain out of special budget supervision
[BRUSSELS] The EU said Wednesday it would end its special budget supervision for Britain after almost a decade, saying London had reduced its excessive deficit enough to fall within the bloc's public spending rules.
The news from Brussels will come as a boost to finance minister Philip Hammond as he unveils the government's annual budget against the backdrop of looming Brexit and sluggish growth.
The European Commission ended its monitoring regime for non-euro Britain, first imposed in 2008, saying London had reduced its deficit - the shortfall between revenue and spending - in a "timely and durable" way.
"On what happens to be the day of Philip Hammond's budget, we have a good news for him - we are closing the excessive deficit procedure for the UK," EU economic affairs commissioner Pierre Moscovici said.
"The country has durably reduced its deficit from a peak of 10 per cent of GDP in 2009-10 to 2.3 per cent in 2016-17, in line with the council recommendation of 2015." European Union rules adopted since the 2008 global financial crisis give Brussels increased oversight powers to ensure member states meet the targets and so avoid a repeat of the crash which brought the economy to its knees.
When the EU first put Britain under surveillance in 2008, it gave London until it until 2009-10 to come into line with the rules, which limit the overall public spending deficit to three percent of GDP.
But the global financial crisis put government finances everywhere under intense pressure and pushed the British deficit up, forcing Brussels to push back the deadline.