by RogueTrooper
Fri Jul 1st, 2005 at 07:15:52 AM EST
From the BBC
Germany looks set to face disciplinary proceedings after warning it is likely to break European Union (EU) budget deficit limits for another year.
Official figures showed that without policy changes Germany is likely to break the EU deficit cap of 3% of gross domestic product (GDP) until 2008.
It has already broken that limit every year since 2002, and is set to unveil a deficit of 3.7% of GDP in 2005.
Europe began action against Italy on Wednesday for breaking deficit rules.
The European Commission (EC) gave Italy until the end of 2007 to slash its deficit to below EU limits.
Italy's deficit stood at 3.2% of GDP in 2001, 2003 and 2004, and the EC has predicted it will record a 3.6% shortfall this year - before rising to 4.6% in 2006.
It looks like Germany will be sharing the same fate as the Italians.
Mr Eichel has claimed until recently that he could rein in the German deficit to 2.9% - in line with EU budget rules set out in the European Stability Pact.
The budget rulebook had been revamped after France and Germany repeatedly broke pact rules.
In December last year, the EC called a truce in its battle with the two over deficit limit breaches.
The move came after France and Germany vowed to run their budget deficits below the EU cap in 2005 - for the first time in four years.
But, the EC did warn the two were under close scrutiny and it would act if their fiscal situations deteriorated.
As a result of Mr Eichel's admission about the German budget the country now looks likely to face the same disciplinary fate as Italy this autumn.
