Germany's budget deficit climbed in the first half of 2003, largely because of increased social security costs, the country's official statistics office said Friday. The €69 billion ($79 billion) deficit was €11 billion over the same half year in 2002. Budget cuts by Germany's cities and communities kept expenditures low, but social security expenses such as welfare and unemployment benefits, especially among Germany's states, led to the increase. Unemployment remains one of the country's greatest challenges, with around 11 percent of the population unemployed. Finance Minister Hans Eichel reportedly told the European Union this week that his country's deficit will make up 3.8 percent of the GDP this, violating the EU's economic stability pact for the second year in a row.