German finance minister Hans Eichel said he cannot rule out Germany once again breaching the EU Stability and Growth Pact deficit limit of 3pc of GDP this year. "With our planned savings package we will be able to hold to the critical deficit limit of 3pc, if our economy grows by 1pc," Eichel said in an interview with Bunte magazine. "If the economy continues to worsen, however, we will not succeed." While Europe's largest economy is expected to reduce its deficit from last year's 3.75pc, it has been speculated that it may not be able to do enough to bring the deficit under the 3pc limit. The EU disciplined Germany and Portugal last year for breaching the Pact, while it approved an official warning for France that its budget deficit risked breaking the 3pc limit. In a separate development today, the European Commission said that Portugal may need further budget tightening measures in 2003 due to a risk that economic growth in 2003 "might turnout weaker than foreseen". It also said that the assumed pattern of growth for 2004 to 2006 "can be questioned" as it is overly reliant on increased domestic demand. //www.fxcentre.com