U.K.'s Brown Faces EU Warning Over Deficit Breach, Draft Says
The European Commission will tomorrow reprimand the U.K. over its budget deficit, saying Chancellor of the Exchequer Gordon Brown is likely to exceed European borrowing limits for four consecutive years. EU Monetary Affairs Commissioner Joaquin Almunia will say Britain's deficit will reach 3.2 percent of gross domestic product in the fiscal year through March 2006, the same as a year earlier and above the European Union's 3 percent ceiling. The commission expects a deficit ``of the order of'' 3.25 percent in fiscal 2007 and ``slightly above'' 3 percent the following year. Previous economic projections for the U.K. ``are no longer tenable,'' the commission said in a document to be published in Brussels tomorrow. The deficit ``does not result from an unusual event'' and cannot be blamed on ``a severe economic downturn.'' The criticism is an embarrassment for Brown, who insists he can meet his self-imposed rules to balance non-investment spending and tax revenue over the economic cycle as he increases spending on schools and hospitals. The government plans to boost spending by 100 billion pounds ($180 billion) over the next three years, according to budget documents published in March.
No comments:
Post a Comment