Six of the European Union's 10 new members were given notice today that their budget deficits exceed the bloc's limits but will be given plenty of time to take corrective action, the European Commission said today.
Poland, the Czech Republic, Hungary, Cyprus, Slovakia and Malta racked up 2003 deficits above three per cent of gross domestic product, which is the cap set in the EU's Stability and Growth Pact and also the threshold set for euro entry.
The countries are expected to provide the Commission by May 15 with a realistic timeframe for bringing the deficits below the EU limit, European Economic and Monetary Affairs Commissioner Mr Joaquin Almunia said.
The new member states will officially be given a longer grace period that current euro zone members to curb their deficits as their entry into the EU on May 1st is seen as a special circumstance that warrants more leeway.
In 2003, Poland's deficit was worth 4.1 per cent of GDP, the Czech Republic's 12.9 per cent , and Hungary's 5.9 per cent . Cyprus had a shortfall of 6.3 per cent of GDP while Slovakia and Malta ran deficits of 3.6 per cent and 9.7 per cent of GDP respectively.
The Commission's official forecasts, which were last updated in April, predict all six countries will continue to top the EU's deficit limit this year and next, though the shortfalls are seen narrowing over that period.