German finance minister Hans Eichel has appealed to his EU counterparts to give Germany more time to reduce its public deficit. The European Commission has already given Germany and France an additional year to get their deficits below the 3pc limit of GDP set under the Stability and Growth Pact, but the revised plan still calls for Germany to make budget savings of E6bn next year. In a letter to EU colleagues ahead of a finance ministers' meeting this week, Eichel rejected the call for further budget savings, saying that such measures could put the economic recovery at risk.
"Germany will continue to behave in accordance with the goals of the stability pact," Eichel wrote. "But the regeneration of the German economy must not be put in question by a short-term, unreasonable policy." Tanaiste Mary Harney last week said that the pact should not be interpreted in a "purely mechanical" way. She told the Institute of European Affairs' that the EU co-ordination of fiscal policy must be "adaptable". EU finance ministers are set to debate France and Germany's successive breaches of the pact when they meet in Brussels today. ///www.fxcentre.com