Who are the EU rule-breakers?

Almost every eurozone member, including France and Germany, broke the deficit rules.

As Owen noted earlier, the proposed EU treaty will include automatic sanctions for member states that break the rules on borrowing. The new fiscal accord includes a requirement for states to curb structural deficits (those that remain even when growth has returned to normal) at 0.5 per cent of GDP and for "more intrusive control" of taxing and spending by governments that breach the existing deficit limit of 3 per cent. However, it will also include a loophole allowing the deficit limit to be waived in "exceptional circumstances" such as deep recessions or natural disasters.

Which is just as well, since, as the table below (from Charles Wyplosz of the Graduate Institute in Geneva) shows, of the original 12 members of the single currency, 10 have exceeded the deficit limit of 3 per cent since 1999. Germany has been in breach of the limit for five of the last 13 years, while France has been in breach for seven.


In addition, Greece has broken the rules every year (which goes some way to explaining its current travails), Portugal in ten of those years and Italy in eight. Indeed, every original euro member except Luxembourg and Finland has overborrowed at some point. If history is any guide, the rules will prove more "flexible" than they look.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.