EU act on German budget deficit
18 November 2003 , BRUSSELS - The European Commission was poised Tuesday to start disciplinary procedures against eurozone economic giant Germany for failing to keep its budget deficit under 3 percent of Gross Domestic Product (GDP).
18 November 2003
BRUSSELS - The European Commission was poised Tuesday to start disciplinary procedures against eurozone economic giant Germany for failing to keep its budget deficit under 3 percent of Gross Domestic Product (GDP).
The Commission - eurozone policeman as well as the executive arm of the European Union - was expected to press ahead with action against Germany despite Berlin's repeated promises that it is striving to rein in spending.
EU finance ministers meeting in Brussels next week are not expected to endorse Commission action against Germany.
But even if financial sanctions against Berlin are unlikely, the Commission move is a political embarrassment for Germany which helped write eurozone rules in 1997.
Germany has been in violation of the eurozone stability pact for two successive years and is certain to do so again in 2004.
The Commission is authorised to take disciplinary measures against countries which run up excessive budgetary deficits for three successive years.
A Commission report published recently said the German budget deficit would stand at 4.2 percent in 2003, falling slightly to 3.9 percent in 2004 and 3.4 percent in 2005.
Germany follows fellow eurozone heavyweight France into the EU dock.
Earlier this month, French Finance Minister Francis Mer won a three-week reprieve from his eurozone colleagues to come up with "credible" new action to slash the French budget deficit.
Both France and Germany contend that countries which are "cooperating" to bring down their deficits should not face disciplinary action.
But hardliners Austria, Finland and the Netherlands are adamant that a strict application of eurozone financial rules is needed to preserve the credibility of the stability pact.
Subject: German news