Brussels, 21/09/2005 (Agence Europe) - As previously announced, the European Commission adopted a report on Wednesday on the United Kingdom budget situation following London's recent notification of a deficit of 3.2% of GDP for 2004-05 (April to March)., a level that had already been reached during the previous tax year. By including around £ 1 billion in revenue from the sale of UMTS licences, the British authorities gave notification of a public deficit of 3.1% but this practice goes against Eurostat's decision on how revenue is processed and the Commission re-evaluated the ratio. In 2004, public finance in Britain was not subject to reinforced surveillance and the Commission and the Economic and Finance Committee (EFC) believe that the deficit was close to the 3% ceiling and was only temporary. Adopted on the basis of Article 104§3, “although close to the reference value, the deficit reached the 3% ceiling over the last two years and cannot be corrected in the current tax year”. British debt stands at 40.8% for 2004-05 and is below the reference value of 60% of GDP. The EFC is being called on to give its verdict before the Commission makes any recommendation on excessive debt procedures (104§4 and 5). Although it has not adopted the Euro, the United Kingdom has to “do its best to avoid excessive deficits” but is not at risk of being subject to sanctions if it does not succeed in this respect.