Duitsland schendt Stabiliteitspact voor zesde achtereenvolgende jaar (en)

Germany is set to break the stability and growth pact in the next three years, the German minister for finance, Hans Eichel, has said, according to news agency Bloomberg.

The country's projected budget deficit is 3.7 percent of GDP this year, 3.4 percent in 2006 and 3.1 percent in 2007, meaning that Germany will not stick to the 3 percent limit for the fourth, fifth and sixth consecutive years.

Speaking to the press on Thursday (30 June), Mr Eichel described the fiscal situation as "dramatic", as rising unemployment is dragging the growth of the EU's biggest economy.

"Now an extremely thrifty budget policy is needed", said Eckart Tuchtfeld, an economist at Frankfurt-based Commerzbank AG, quoted on Bloomberg.

"There is not too much leeway for it without further cuts in social-welfare spending", he added.

The government had previously forecasted the 2005 deficit at 2.9 percent of GDP.

Under the pact's rules, governments that breach the 3 percent limit can be fined, although no country has been so far.