Berlin, Paris Set to Face Flak from Brussels

According to reports in the German media, Berlin is set to 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 on Monday. But Paris believes it will scrape under the bar by the end of 2005.