Italy breaches EU deficit, France under scrutiny

12th April 2005, Comments 0 comments

LUXEMBOURG, April 12 (AFP) - EU economic affairs commissioner Joaquin Almunia is to launch disciplinary measures against Italy for its excessive deficit "probably before June" and is keeping a close eye on German and French finances, he said Tuesday.

LUXEMBOURG, April 12 (AFP) - EU economic affairs commissioner Joaquin Almunia is to launch disciplinary measures against Italy for its excessive deficit "probably before June" and is keeping a close eye on German and French finances, he said Tuesday.

Almunia told a press conference that the European Union's executive commission, which is responsable for policing deficits in the EU, would take the first steps towards disciplinary action against Rome for countries that breach a public deficit limit of three percent of output.

The Italian government has told Brussels that its deficit came in at three percent of gross domestic product (GDP) last year, but the EU's statistics arm, Eurostat, refuses to validate the figure, which could be even greater, Almunia said.

The European Commission has forecast that Italy's deficit could stand at 3.6 percent this year and swell to 4.6 percent in 2006.

Almunia said he was also studying the Portuguese finances, which risk showing a deficit of 4.9 percent of GDP this year.

Almunia said the commission was keeping a close eye on France and Germany, which have promised to live up to the three-percent limit this year after breaking it for years.

"We are closely monitoring and in the coming months we may need to adopt new decisions," he said.

Almunia added that the situation for Germany this year "is more difficult because of the lack of growth, mainly".

The German government is due to take fresh deficit-cutting action in April, he said.

"On the basis of this, decisions will have to be taken as to whether new (disciplinary) measures will have to be taken or not to keep the deficit as close as possible to three percent, but without of course harming the economy," he said.

© AFP

Subject: French News

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