News

The European Commission’s report Public Finances in the EU 2009 released on 23 June predicts that EU public debt will increase to 80% in 2010 (compared to 60% of GDP in 2007) and that the financial support given to Europe’s debilitated banks could cost EU budgets up to 16,5% of combined GDP.



If the indirect effects on the budget, such as unemployment benefits and discretionary stimulus packages for the real economy are taken into account the individual costs to Member States will even be much higher.



In the report the Commission is pushing the Member States for stronger public institutions and legislation as a way to limit the expense due to delays in implementing bank recapitalisation and restructuring.



UNI europa stresses that as governments have spent huge amounts of taxpayers’ money to save financial institutions from bankruptcy, it must be guaranteed that this money does not support “business as usual”. Banks receiving state aid should be required to comply with sound business principles and not be allowed to engage in high risk activities.