Frankrijk en Duitsland blijven Stabiliteitspact overschrijden (en)

Paris and Berlin are expected to come under renewed pressure from Brussels today after they officially report new breaches in the rules underpinning the euro.

According to reports in the German media, Berlin will today inform the European Commission that its budget deficit will be 3.3 percent of gross domestic product (GDP) this year and its debt will be 65 percent of GDP.

If confirmed, this would represent the third year in a row that Germany - the EU's largest economy - has breached the strict limits of three percent for deficits and 60 percent for debts.

The German government says it is committed to reducing the deficit under the three percent bar by 2005, but the Commission said there were "risks" attached to this in a recent report.

Meanwhile, France - also in the dock over the euro rules - is expected to report a deficit of just over four percent today. But they too believe they will scrape under the bar by the end of 2005.

No sanctions

This situation would usually lead to a disciplinary procedure being put in place against Paris and Berlin - a procedure which can lead to fines of billions of euro.

But in November last year, EU finance ministers - spurred on by France and Germany - voted to suspend the procedure against the two economic giants of the 12 country euro zone.

This enraged the Commission, which is now taking the council of finance ministers to court in a high-profile case that is expected to be resolved towards the middle of this year.

It also infuriated certain member states - primarily Austria and the Netherlands - who argued that if the two largest countries failed to keep to the rules, it would be impossible to ensure the rules were adhered to in future.

But many economists argue that the rules are too strict and that countries should not be forced to save when growth is slow - as is the case in France and Germany.

The Commission is due to publish proposals for a reform of the euro rules - known in EU jargon as the Stability and Growth Pact - later in the year.