EU FORECASTS Euro zone 2007, 2008 deficit forecasts cut sharply |
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Mon, 07 May 2007 11:02
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BRUSSELS (Thomson Financial) - The European Commission cut its euro zone deficit forecasts sharply for 2007 and 2008, but called on member states to do more to improve their public finances.In its spring forecasts, the commission projected an overall euro zone deficit of 1.0 pct of GDP for this year rather than 1.5 pct, and 0.8 pct instead of 1.3 pct for next.It noted however that five EU countries plus euro zone member Portugal will still post a deficit above the stability and growth pact's ceiling of 3 pct of GDP in 2007.'We must help sustain the economic recovery by putting public finances firmly on a sounder footing and by pursuing the reform process,' EU economic and monetary affairs commissioner Joaquin Almunia said in a statement.Of the euro zone countries currently facing EU fiscal disciplinary measures, the commission confirmed that Germany and Greece last year brought their deficits below 3 pct of GDP.'A better-than-expected reduction of the deficit was also achieved for Portugal and Italy (net of a large deficit increasing one-off),' it said.'By 2007, only Portugal is expected to present a deficit above 3 pct of GDP and, in the absence of further measures, this would still be the case in 2008,' it said.For the EU as a whole, the commission cut its deficit forecasts to 1.2 pct of GDP for 2007 from 1.5 pct, and to 1.0 pct for 2008 from 1.4 pct.victoria.main@thomson.comvm/cmlCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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