Brussels have warned France and Italy over their alarming levels of public debt, meaning that their future budget could deviate significantly from EU’s fiscal rules and deter investors.

The European Commission’s opinion published on Wednesday during the presentation of the autumn fiscal package, slammed France, Italy, Spain and Belgium for their progress in reaching the EU’s debt reduction targets for 2020 and praised the Netherlands and Germany for their consistency in increasing public spending for 2020.

While eight countries’ budgetary plans are at risk of non-compliance with the EU’s fiscal rules, those four countries were heavily criticised for not taking sufficient advantage of recent declines in interest expenditure in order to reduce their debt ratios and for risking a possible negative spillover effect on the public debt markets of other euro-area member states.

Italy has serious difficulties “putting its finances in order”, with a debt-to-GDP ratio that goes up to the alarming 136%, while France’s debt burden reaches almost 100%. EU rules foresee that countries are obliged to reduce their public debt when this exceeds 60% of the GDP.

Spain has pledged to present a draft 2020 budget combining fiscal discipline with economic growth, job creation and structural reforms, by the time a new government is set up and so has Brussels. France and Italy, Europe’s second and third-largest economies, on the other side, were not asked to make any adjustments to their budgetary plans, although France is set to comply with the EU rules by 2020 and Rome has promised to keep its deficit broadly stable.

The 28-country bloc’s asymmetries in terms of debt levels are leading to a slowdown of the European economy, despite Eurozone’s stronger position than the previous years. The Commission urged member states to make use of their fiscal tools “to get ready for the challenging times ahead.”

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “With this year’s opinions, we confirm our commitment to a flexible, intelligent application of our common rules, guided by an awareness of the economic reality in each country and in the euro area as a whole.”