European Union finance ministers said today that Germany's medium-term budget plans may be insufficient to bring its deficit back under the EU's limit in 2005.
In a statement on Germany's so-called budgetary stability programme, ministers said the growth forecasts for 2005 and later years that underpinned Berlin's plans appeared optimistic.
"Under less favourable macro-economic and budgetary assumptions, the adjustment path in the programme may be insufficient to correct the excessive deficit in 2005," the statement said.
Today's debate on Germany's budget plans was the first formally at EU level since Berlin persuaded its partners last November to drop disciplinary action against it for running a deficit above the EU's 3 per cent of gross domestic product limit.
Germany's budget deficit exceeded the EU's 3 per cent deficit limit in 2002 and 2003 and is expected to also breach that level this year.
In the latest budget plans submitted for EU review, Germany's deficit would fall to 2.5 per cent in 2005, assuming the economy grows 1.7 per cent this year and by 2.25 per cent in 2005 and following years.
The assumption of annual growth of 2.25 per cent from 2005 was optimistic, the EU ministers said.