2 December 2002, 12:57  Germany could breach EU pact next year

The vice president of the Bundesbank Juergen Stark said it is possible Germany could infringe the EU's stability pact next year as well as in 2002. Speaking in an interview with the Sueddeutsche Zeitung, Stark said finance minister Hans Eichel's austerity package may not be enough to prevent Germany overshooting the 3pc of GDP budget deficit limit outlawed under the Maastricht treaty. "It is unclear whether the planned additional income and less expenditure will actually come in the expected magnitude," said Stark.
Eichel hopes his package will reduce the deficit to 2.75pc of GDP next year from an expected 3.75pc this year. Meanwhile, Stark also said Italy deserves an early warning from the EU over its budget deficit, which he said the country has only managed to control with cosmetic one-off measures //www.fxcentre.com

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