EU ready to delay action against Germany
The European Commission is prepared to wait until 2006 before reviving disciplinary proceedings against Germany for repeated breaches of European Union budget rules, a German magazine reported yesterday. EU Monetary Affairs Commissioner Joaquin Almunia is ready to delay until early next year a move that had been expected in November in order to help Germany form its next government, weekly magazine Focus said, citing sources close to Almunia. Following a September 18 election that yielded no clear winner, talks between the conservatives under Chancellor-designate Angela Merkel and the incumbent Social Democrats (SPD) aimed at producing a coalition government are due to start tomorrow. Germany's budget deficit will exceed the three per cent of gross domestic product limit prescribed by the EU's Stability and Growth Pact for a fourth straight year in 2005. Merkel's Christian Democrats and the SPD have acknowledged the need to respect EU budgetary rules as soon as possible and designated Finance Minister Peer Steinbrueck (SPD) on Friday mooted a return below the 3pc cap in 2007.
However, there still appear to be differences between the two sides on how best to proceed with budgetary consolidation. The SPD will urge federal spending cuts of 14.5 billion euros ($17.4bn) in the talks as part of a plan to meet pact requirements in 2007, party sources said yesterday.
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