Brussels, 28/01/2002 (Agence Europe) - On Wednesday, the European Commission may adopt its recommendations concerning the updating in 2001 of the stability and convergence programmes of nine Member States, including Germany and Portugal. On this subject, it may propose that the Ecofin Council of 12 February should give a warning, because of the slide in these countries' public deficits (see EUROPE of 18 January, p.8). We recall that Germany's budgetary deficit reached 2.6% of gross national product in 2001 and that the Commission predicts 2.7% in 2002. Portugal's deficit is expected to be 2.2% in 2001, twice as much as foreseen in its stability programme.
The Commission is expected, however, to conclude that the updated programme presented by Italy is conform to the requirements of the Stability and Growth Pact, though considering that the growth prospects of this country for 2002 and 2003 are "over optimistic". The Italian government believes it can achieve growth of 2.3% in 2003 and 3% in 2003, whereas the figures put forward by the Commission are more modest at 1.3% and 2.7% respectively. Furthermore, the Commission may express doubt about Italy's estimates concerning the rate of deficit compared to GDP. Italy considers it will notch up no more than 0.5% in 2002 instead of the 1.2% according to the Commission, which should also request that Silvio Berlusconi's government accelerate reforms (mainly the liberalisation of the electricity and gas sectors) and keep on track for retirement spending.