EU offers budget flexibility for debt-hit France, Italy

The EU signalled today it would show leniency to overspending member states including Italy and France that are nearing an already extended deadline to get their budgets in line with Brussels rules.
Eurozone ministers last month approved an extra three months for France, Italy and Belgium to fix their bloated budgets, but warned they could still face sanctions if they fail to take action.
But in a sign that Rome and Paris may avoid penalties, the EU's top economic officials offered the countries unprecedented wiggle room, even as they insisted the regulations remained essentially unchanged.
Valdis Dombrovskis, the European Commission's vice president for the euro, said countries that obeyed the rules "can then enjoy bigger flexibility".

"We are clarifying how we will implement the existing rules of the pact: we are not changing or replacing the rules," he told a press conference at the European Parliament in Strasbourg.
Dombrovskis was referring to the Stability and Growth Pact, the complex set of EU rules that were signficantly tightened in the aftermath of the eurozone debt crisis in order to prevent a repeat.
The pact, cherished by powerful Germany, includes strict but often broken limits on running up deficits and public debt, along with the possibility of penalties for rule-breaking nations.
"The idea is to reach a more intelligent interpretation of the pact," said Economics Affairs Commissioner Pierre Moscovici.