Germany under EU pressure for budget deficit

11th October 2005, Comments 0 comments

11 October 2005, LUXEMBOURG - Germany was pressed by fellow European Union members Monday to slash its budget deficit to within agreed E.U. limits by 2007, a key challenge facing the new government taking shape in Berlin after last month's early election.

11 October 2005

LUXEMBOURG - Germany was pressed by fellow European Union members Monday to slash its budget deficit to within agreed E.U. limits by 2007, a key challenge facing the new government taking shape in Berlin after last month's early election.

Luxembourg Prime Minister Jean-Claude Juncker, chairing a meeting of E.U. finance ministers from nations that use the euro, told reporters that Germany must meet all targets of the European Stability and Growth Pact by 2007.

Germany's budget deficit is running above the pact's limit of 3 per cent of gross domestic product for the fourth straight year.

Finance Minister Hans Eichel, a Social Democrat, said meeting the limit next year would require economic shock therapy and that even 2007 was an ambitious target.

"That will require major efforts," he told reporters.

Austria, a leading critic of Germany's deficit, renewed calls for its big neighbour to kick-start its economy, Europe's largest.

"It's crucial for Germany to increase growth," said Austrian Finance Minister Karl-Heinz Grasser, a conservative.

Tuesday's full 25-member talks by the finance ministers were expected to centre on Hungary, which E.U. statisticians expect to run a whopping 6-per cent deficit this year.

The formerly communist nation, which joined the bloc last year along with nine other newcomers, risks a suspension of E.U. aid money if it fails to get its fiscal house in order.

DPA

Subject: German news

0 Comments To This Article