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EU finance chiefs end deficit procedure against Germany

European Union finance ministers on Tuesday agreed that Germany is no longer in breach of the bloc’s financial rules and confirmed that Malta and Greece have also brought their budget deficits in line with the EU limit.

Germany received the formal all-clear from all 27 EU finance chiefs after faster economic growth helped Berlin cut the budget deficit below the EU limit of 3% of GDP for the first time since 2002. The German budget deficit fell from 3.2% of GDP in 2005 to 1.7% in 2006.

Germany is expected to pare its once-excessive budget deficit down to 0.6% this year, reaching 0.3% of GDP in 2008. EU Economic and Monetary Affairs Commissioner Joaquin Almunia on Monday commended Germany for ‘impressive’ work in coming under the EU ceiling by a very wide margin a year earlier than ordered. (