No change in stance on Berlin's budget deficit: EU

5th December 2005, Comments 0 comments

5 December 2005, BRUSSELS - The European Commission on Monday said it had no plans to change its hardline stance on Germany's burgeoning budget deficit despite German Finance Minister Peer Steinbrueck's calls over the weekend for no escalation in Brussels' sanctions procedures against Berlin. A Commission spokeswoman said European monetary affairs chief Joaquin Almunia had "no reason" to believe it was necessary to change Brussels' planned excessive budget deficit procedures against Germany. Almunia was en

5 December 2005

BRUSSELS - The European Commission on Monday said it had no plans to change its hardline stance on Germany's burgeoning budget deficit despite German Finance Minister Peer Steinbrueck's calls over the weekend for no escalation in Brussels' sanctions procedures against Berlin.

A Commission spokeswoman said European monetary affairs chief Joaquin Almunia had "no reason" to believe it was necessary to change Brussels' planned excessive budget deficit procedures against Germany.

Almunia was encouraged, however, that the new German government was committed to reducing its budget deficit by 2007 and considered the issue a "top priority," the spokeswoman said.

The Commission made its comments ahead of a meeting of E.U. finance ministers which Steinbrueck will attend for the first time.

The E.U. executive said last month that it expected the German budget deficit in 2005 to be "even higher" than 3.7 per cent of GDP forecast by the country's authorities.

This is the fourth successive year that Berlin will be in breach of eurozone fiscal rules which set a 3 per cent of GDP ceiling for national budget deficits. Many analysts predict a further overshoot next year.

The 3-per-cent rule has also been broken by France, Italy and several other key eurozone economies.

The Commission has said that E.U. finance ministers will discuss the Commission's economic recommendations for Germany in December.

DPA

Subject: German news

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