Staff Writer
Columbus CEO

c.2013 New York Times News Service

BRUSSELS — The European Union’s top economic policy chiefs warned Germany, France and 14 other member countries to address problems with their economies, testing the limits of new oversight tools as they work to prevent another crisis that could sink the euro.

“By virtue of their size in the European economy, Germany and France have a special responsibility to contribute to the recovery in the rest of the euro area,” said José Manuel Barroso, speaking shortly after the commission subjected the countries to a comprehensive review, which included an examination of Germany’s trade surplus.

Barroso, addressing a news conference, called on the French government to make public spending more efficient, simplify regulations for businesses and create a more growth-friendly tax system.

The verdicts form part of a series of policy recommendations in 11 areas, from employment to public finances. The goal is to screen all 28 member states for economic risks, known as macroeconomic imbalances, by issuing early warnings under rules that came into force in December 2011.

In theory, laggards could be fined. In practice, the commission has decided to shy away from full-blown confrontation with member states by making the exercise more of an advisory one.

“This looks like a big procedure, but for no country is there any chance of any concrete enforcement action at present,” said Daniel Gros, the director of the Center for European Policy Studies, a research organization in Brussels. “In one way or another the commission has put a majority of member countries into the review, and when you put everyone in the same boat you reduce the scope for identifying stand-out cases.”

The announcement Wednesday also included some separate general economic prescriptions.

Overall, the European Union has shrunk its average budget deficit by around half since a peak of almost 7 percent of gross domestic product in 2009, and has “created room” for a reduced emphasis on austerity, according to a report issued by the commission. But levels of sovereign and private debt are still too high and member states need to open their product and services markets, the commission said.

Member states were also told to offer more training to reduce unemployment, which is likely to remain high in Greece and Spain through next year, and to increase in France.

The commission decided to open a further review into serious problems in Spain, noting its high levels of unemployment, and Slovenia for problems such as weak corporate balance sheets.