The Czech Republic got bad marks for failing to curb its budget deficit with the Commission urging the country to get its budget below the 3% of GDP threshold by 2008.
Despite the country's sound economic performance, its deficit is expected to reach up to 3.9% in 2007 and 3.6% in 2008, thus failing to meet EU requirements, the Commission said on 30 May. In 2004 the Czechs had vowed to bring their budget deficit down to 3% of GDP until 2008. Economic and Monetary Affairs Commissioner Joaquin Almunia said: „Whereas there is a need to react, the 2007 budget includes substantial increases in expenditure.” He added: „I hope this will be corrected as soon as possible as there is still an opportunity to do so.”
The Czech Republic seeks to join the eurozone by 2010-12, but in order to do so it needs to curb its budget deficit, keep inflation low and fix its exchange rates. EU finance ministers are expected to echo the Commission's call for action on curbing budget deficit when they meet on 10 July in Brussels. The Commission also assessed Austria's stability programmer, saying it „could be more ambitious” and reach a balanced budget „more quickly than currently envisaged”. (euractiv.com)