BRUSSELS (AFX) - UK Chancellor of the Exchequer Gordon Brown Monday will tell fellow EU finance ministers that the government will not change its medium term budget plans including a rise in public investment spending which could cause a budget deficit of 1 pct of GDP, UK government sources said.
The monthly EU finance council will be discussing a European Commission draft recommendation for the annual broad guidelines of economic policy - for the EU as a whole, but also for individual member states - which is to be adopted next month.
In its draft, the Commission says it is concerned the UK could be moving towards a higher deficit than expected. But the sources said the UK will not be deflected from its spending plans, based on the premise that it is acceptable to borrow for productive public investment but not to cover current expenditure. They said Brown will tell the Ecofin meeting that the UK will carry out its plan and the Commission has no legal right to express a view on the issue. The UK fully expects the reference to be removed in committee work before leaders endorse a final text at the Gothenburg summit mid-June, they said.
Brown, who does not always attend the EU finance ministers' monthly councils, will do so this time also to support the research, development and innovation initiative he has called for, in the aim of boosting the long-term growth rate, they said.