EU to check if Germany on track to fix finances

29th June 2005, Comments 0 comments

29 June 2005, BRUSSELS - The European Commission will review the German and French excessive budget deficits in September, assessing whether the two eurozone economic giants' are on track to put their financial house in order, E.U. monetary affairs chief Joaquin Almunia said on Wednesday.

29 June 2005

BRUSSELS - The European Commission will review the German and French excessive budget deficits in September, assessing whether the two eurozone economic giants' are on track to put their financial house in order, E.U. monetary affairs chief Joaquin Almunia said on Wednesday.

Almunia told reporters the Commission - which is eurozone watchdog as well as E.U. executive - had three options: it could either decide that the two countries were on track to bring their deficits under 3 per cent of Gross Domestic Product (GDP) as set out under the stability pact or, because of low economic growth levels, give the two states another year to bring their deficits under the threshold.

The E.U. chief warned, however, that he would proceed with the excessive deficit procedures - which could lead to sanctions against Germany and France - if the two countries were deemed not to have taken "appropriate measures" to rein in their budget deficits.

Both Germany and France have been in breach of the stability pact for several years. However, eurozone fiscal rules were made more flexible in March this year to give countries more time to put their finances in order.

DPA

Subject: German news

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