BRUSSELS, Nov. 15 (UPI) -- EU leadership has begun disciplining member countries over bloated budgets before the nations' politicians have the chance to present the data to their own national parliaments.
In the clearest indication yet of EU leaders' expanding powers in the hard-pressed economies dependent on Brussels for aid, European Commission executives served notice on Italy and Spain to get their budgets in order and to ensure compliance with new rules on managing deficits.
The commission is the EU's executive arm, in effect the federal government, but hasn't ever before voiced its opinion on budgets with such vigor before they're presented to lawmakers in respective countries.
Analysts said the EC move was part of a wider European effort to discipline errant governments and to forestall budgetary problems requiring bailouts at a later stage.
Bailouts of troubled economies including Greece have become increasingly unpopular in Europe and became an election issue that threatened German Chancellor Angela Merkel's approval ratings before that country's elections in September. Merkel was elected with a comfortable majority, but bailouts drawing on taxpayer funds remain a flashpoint not only in Germany but also in other neighboring countries.
New EU rules require member countries' governments to keep their spending in check and reduce budget deficits in conformity with standards set by the Commission. EU economic growth is slowing, and European officials are keen to discourage any suggestion the member countries' economies may face deflation.
The EU is particularly keen to see governments doing more to cut their public spending.
Italy received a reprimand from Brussels after its budget showed rising public spending and EU senior officials worried over its likely impact on the country's bloated deficit. France, which has suffered a succession of sovereign downgrades by international rating agencies, didn't escape the EU's disapproval.
The EU now wants Europeans to spend and not be discouraged by recent price increases, which are seen to be under control and in some countries on the decline. Analysts say Europe still faces the threat of a deflationary trend spreading across the eurozone and undermining economic recovery.
Prices across the eurozone fell month-on-month in October, largely in response to deflationary trends the EU wants to avoid.
The eurozone's economic growth appears to have risen by just 0.1 percent in the July-to-September period, a disappointing trend, say analysts who cite 0.3 percent growth in the previous quarter. The regulatory response so far has been to keep cutting interest rates. Last week the European Central Bank cut its benchmark interest rate to 0.25 percent as part of the same drive to stimulate European economies.