EMU: ALMUNIA OUTLINES SCENARIO FOR TACKLING GERMANY'S EXCESSIVE DEFICIT.
Step one: an acknowledgement of failure. It is necessary to acknowledge that Germany has failed to comply with recommendations ordering it to return to the course set in 2003 (Germany's public deficit stood at -3.7% of GDP in 2004). The Commission is therefore preparing to reappraise Berlin's budgetary situation in the light of its autumn economic forecasts and the economic guidelines drawn up by the new ruling coalition. This review will then be submitted to the EcoFin Council (in January) with EU Finance Ministers then left to accept its thrust (which would appear highly likely).
Step two: within two months the Commission should draft new recommendations in accordance with Article 104 s. 9 of the Treaty (in line with new stability pact rules). This is a crucial stage since the hypothesis of retaliatory measures then becomes a possibility "so long as a member state fails to comply with a decision taken under paragraph 9", according to Article...
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