EU countries debate reform of Stability and Growth Pact rules – Bloomberg reports that Germany’s Economy Minister and Deputy Chancellor Sigmar Gabriel (SPD) defended his previous remarks that supported the possibility of easing deficit targets for France and Italy in return for commitments for additional reforms. Gabriel said that he favoured “more honesty in this debate”, as Germany also needed time when Gerhard Schröder’s 2010 reform agenda was introduced. On the other hand, Deputy Finance Minister Kampeter said that the existing EU Stability and Growth Pact rules offered sufficient flexibility to ensure a growth-friendly consolidation of budgets in EU states, according to Rheinische Post. Meanwhile, Süddeutsche Zeitung reports that a group of countries including France and Italy were preparing a proposal to exempt credit-financed increases in public investment in growth and employment-creating spending from the Stability and Growth Pact. The proposal was intended to be discussed at the June 26-27 EU Summit, according to the newspaper.
Italy – Renzi to bargain for more budget flexibility in exchange for supporting Juncker as EU Commission president. A Reuters’ story yesterday (and an FT article this morning) suggested that the Italian government is seeking to negotiate more flexibility in the Stability Pact budgetary rules in exchange for supporting Mr. Juncker as the next head of the EU Commission. The leader of the EU Parliament's Socialists, Hannes Swoboda, told Reuters that a flexible interpretation of the Stability and Growth Pact was a condition for Renzi for “any kind of agreement on a candidate”. He also said that EU Council President Van Rompuy is working on a text for the possible Pact revisions (in particular, the exclusion of productive investment spending from the deficit calculations was recently widely reported as the main request from the Italians). However, the article also reported sources close to the Council President saying that the rules themselves would be left untouched, as they already contained some flexibility, but that instead the policy agenda would contain a stronger focus on growth and employment. Van Rompuy is reportedly meeting Mr Renzi today in Rome. An Italian government official was reported by Reuters saying that the government is not "getting hung up on any particular name, we want commitments on political priorities".

EU countries mostly ignore Semester reform recommendations – Frankfurter Allgemeine Zeitung (FAZ) reports that EU countries mostly ignored the recommendations under the European Semester introduced in 2011. According to a report by the European Parliament, EU countries had only implemented less than 10% of the recommended reforms over the past 12 months, compared to 12% in the previous year. Of 141 reform recommendations provided in 2013, only 12 reforms had “substantially” been implemented and only one “fully”, in 65 cases there had been “some progress”, in 59 cases “limited progress” and in 4 cases no progress at all. The report stated that in Spain one reform had been fully implemented and 8 had seen some progress, whereas in Italy in only one case there had been “some progress” and in five cases “limited progress”. For Germany, out of four reform suggestions, two had seen “some progress” and two “limited progress”. The article states that the reform recommendations for this year were to be discussed at the Ecofin/Eurogroup meeting this Friday, but that these would be likely to result in passing the EC recommendations from June without any alterations, and that there was very little reform dialogue at this point.

En datos económicos, el gasto de construcción creció un 0.8 % en marzo.

En cifra anual el aumento es del 8 %.

Los depósitos en el ECB se han estabilizado en 15.8 bn.

El Euribor 12 meses en niveles de 0.49 %.

José Luis Martínez Campuzano
Estratega de Citi en España