New European Economic and Monetary Affairs Commissioner Mr Joaquin Almunia backed the embattled Stability and Growth Pact this morning and said he would take budget steps against Italy, The Netherlands and Britain.
"The result of our spring 2004 forecasts indicate that corrective action must be taken by several countries," Mr Almunia told the European Parliament's economic and monetary affairs committee.
"Tomorrow I will therefore propose to the Commission that the different instruments of budgetary surveillance be activated for The Netherlands, UK and Italy," he added.
He said he would also ask the Commission to take Portugal out of the excess deficit procedure it had been in since breaking the EU deficit cap of 3 per cent of gross domestic product in 2001.
Mr Almunia also backed the Commission's court action against EU states for waiving the rules of the pact: "I consider it of the utmost importance to re-establish legal certainty for the future in this matter."
"The EU coordination processes have not always been very effective," he added, noting that there had been problems in implementing the fiscal framework. "In order to address these problems a revision of the current fiscal framework is required."