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Draft Budgets based on over-optimistic forecasts

Last week, the European Commission (EC) published the draft Budgets for 2017 as submitted by eurozone governments. On the face of it at least, there is little for the EC to be concerned about. All countries except Germany project improvements in their budget balances compared to this year. However, they are based on very optimistic economic projections. This implies that the EC will conclude that at least some of these Budgets are “at risk of non-compliance” with its rules.

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