Europe’s Finance Ministers meet today to hear how Britain’s Gordon Brown hopes to lead them over the next six months. They will also hear mixed news from some of the Eurozone’s biggest economies: Germany, France and Italy. Europe’s growth rate for this year has again been trimmed. It is now expected to be just 1.3 percent. With budget deficits over EU limits in all three of the countries in the spotlight, there are worries about long-term effects.
75 percent of the EU’s GDP comes from the trio, so Italy is being given two years grace to get its books back in the black. Germany and France, although sickly, are being warned that in 2007 they will be hit by penalties for continued deficit overshoots. Current high oil prices are not helping sluggish growth, and the respective governments concerned also face electoral tests in the upcoming period that may deter them from making cuts to their budgets.