Germany is projecting a deficit/GDP ratio over the 3% limit until 2007 and is set to follow recent black sheep Italy and Portugal into an excessive deficit procedure this autumn.
The German Finance Ministry is forecasting the country's budget deficit/GDP ratio at 3.7% in 2005, 3.4% in 2006 and 3.1% in 2007, heading downwards but still in breach of the rules of the Stability and Growth Pact.
The figures mark a change from previous statements by Germany's Finance Minister Hans Eichel that Germany only risked breaking the deficit in 2005.
Given that news, you may find this statement somewhat surprising:
... addressing a conference hosted by the national banks of Poland and Hungary, Economic and Monetary Affairs Commissioner Joaquín Almunia was busy defending the recently reformed Stability and Growth Pact."Contrary to certain interpretations, the reform has confirmed the Treaty rules for economic and budgetary co-ordination, and cemented the Pact as the core instrument to foster budgetary discipline in Europe,"