BRUSSELS — Top European Union officials on Monday warned France and Italy to do more to reform their economies to prevent a rerun of problems that fueled the region’s debt crisis and nearly destroyed the euro currency union.
The concern is that some large countries in the euro area are not moving fast enough to overhaul their economies and prune budget deficits. Officials in Brussels had already granted France extra time to meet the targets that all member countries have agreed to.
As part of an annual review, Olli Rehn, the EU’s commissioner for economic affairs, reserved his toughest warnings for France and Italy, the second- and third-largest countries in the euro bloc, after Germany.
“In France, the deterioration of the trade balance and competitiveness over the whole of the last decade calls for sustained political action,” Rehn said. The government needs to “go into greater detail about the measures which it intends to take to achieve” its previously agreed goal of reducing its deficit to 3 percent of gross domestic product by 2015.
Turning to Italy, Rehn warned that the government could still face the wrath of bond markets if it fails to lower its towering national debt.
“Market confidence has been restored, and Italian bond yields are currently at a record low,” Rehn said. “But betting on continued benign financial market conditions may be risky. Market sentiment can change quite swiftly, as we know.”
The report covered 26 of the 28 EU member states, excluding Cyprus and Greece, which continue to receive rescue payments and are already under special, closer scrutiny.
The reviews come at a delicate moment for the leadership in Brussels. Officials are under pressure to reduce their intervention in member states’ national affairs, given the big gains that various anti-EU parties made in May’s elections to the European Parliament in a number countries — and in France, in particular.
José Manuel Barroso, president of the European Commission, the executive arm of the union, sought to buck up governments that have been weakened by insurgent parties, saying at a news conference Monday that the “fundamental challenge for the EU now is political” to “keep up support for reform as the pressure of the crisis recedes.”
Politicians, he said, must “summon the political will to see reform through, even if it is unpopular.”
But for the French members of the Socialist bloc at the European Parliament, Barroso’s approach was a sign Brussels was more out-of-touch than ever.
“Down deep, nothing has changed,” the lawmakers said in a statement, and “austerity and neo-liberalism remain the ideological pillars of an exhausted European Commission.”