The EU has delayed a review of Germany's budget -- and accompanying criticism --until March.
Steinbrück remains optimistic over budget woes
EU economic and monetary affairs commissioner Joaquin Almunia said this week that Germany's deficit troubles are not over yet, despite improvements in their fiscal situations.
Almunia, who polices public finances in the EU, acknowledged at a news conference after a regular meeting with euro-zone finance ministers that Germany's 2005 deficit figures were "better than expected but not so good that we can say there's not an excessive deficit."
However, he promised that any deficit-cutting recommendations from the commission would not threaten a growing recovery in the euro zone's biggest economy.
Almunia will decide if Germany faces sanctions next month
"That's a necessity not just in Germany but also for the rest of the euro area," he said.
Germany -- the EU's largest economy -- has failed for four years to keep its budget deficit under the EU limit of three percent of gross domestic product. It is still not clear if the EU will place Germany in the "excessive deficit procedure" status or give the country more time to let its new government trim public spending. If it doesn't, Germany may have to pay billions in fines or face tighter EU scrutiny and controls on its budgets.
Ahead of a meeting with euro-zone finance ministers, German Finance Minister Peer Steinbrück said he was confident the commission would agree not to press ahead with disciplinary measures against Berlin because of the deficit.
He said he was "optimistic about the possibility of an agreement with the commission" and that "we have no interest for an escalation" in tensions.
Luxembourg Prime Ministers Jean-Claude Juncker, who chairs regular meetings of euro-zone finance ministers, said they were "satisfied" with Berlin's deficit cutting efforts. "We are rather satisfied with our image of the German finances," he told reporters as he arrived for the meeting.