German govt reiterates deficit to drop below 3% in 2005

The German government has reiterated that its deficit will drop below the 3% of the GDP ceiling set out in the EU Stability and Growth Pact in 2005.

The comment followed the European Commission statement saying Germany's optimistic growth forecast for next year puts its ability to meet that target at risk.

A spokesperson for the Ministry of Finance said the government will be able to meet the criteria set out in the Maastricht Treaty, but it will be under difficult conditions.

The spokesperson also said the commission's criticism of its growth forecast as unrealistic was completely unfounded, as the government has not included a growth forecast for next year in the stability plan it submitted to the commission.

The German government projected a cut in its deficit to 3.25% of GDP in 2004 to 2.5% in 2005, 2% in 2006 and 1.5% in 2005, based on predictions of economic growth of 1.5 to 2.0% in 2005 and growth of 2.25% from 2005-2007.