While none of the 15 EU members risks breaching the EU's three per cent of GDP ceiling for public deficits this year, the European Commission warned that Germany is dangerously close.
Economic and Monetary Affairs Commissioner Mr Pedro Solbes acknowledged five of the euro zone's 12 member states are capable of improving their budget deficit targets under the EMU stability pact.
"All the others are doing worse than is required under the stability pact," he said at a press conference following last night's eurogroup meeting.
"All the others are doing worse than is required under the stability pact," he said at a press conference following last night's eurogroup meeting.
"That's normal. That's the consequence of letting automatic stabilisers play," he said.
Mr Solbes said the deficits of certain countries, such as Germany, are above two per cent of GDP, but "that doesn't mean there is cause for great alarm".
The German government recently revised its target for this year's budget deficit to 2.5 per cent of GDP from the previous estimate of 1.5 per cent and to 2.0 per cent from 1 per cent for 2002.
Under the stability pact, euro zone countries are punished if their budget deficits exceed three per cent of GDP.
German Finance Minister Mr Hans Eichel talked about the economic situation in Europe's largest economy during last night's meeting, he said.
He said that so far the European Commission has received stability programmes for 2002 from five euro zone countries.
AFP