EU Calls on Germany to Cut Deficit by 2007

The ministers, meeting in Brussels, gave their backing to a recommendation from the European Commission, which polices public finances in the 25-nation bloc, to step up so-called excessive deficit procedures against Germany, according to EU officials.

Under the measures, Germany has to come up with a credible belt-tightening plan by July that would bring down the deficit to within three percent of gross domestic product (GDP) by 2007.

The government is to officially unveil its 2007 budget in July.

The European Union's Stability and Growth Pact requires member states to keep their deficits to less than 3.0 percent of GDP but many countries have struggled for years to respect the limit.

In theory, Berlin could face huge fines if it fails to rein in its deficit although that would be unlikely if the government sticks to its promises to improve the public accounts.

Germany, which has had a deficit of more than 3 percent since 2002, reported a shortfall of 3.3 percent for 2005.

Along with France, Germany convinced its EU partners to freeze excessive deficit procedures against them last year after a long struggle with Brussels that resulted in the EU's public finance rules being rewritten.