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Europe Daily Bulletin No. 9106
Contents Publication in full By article 15 / 44
GENERAL NEWS / (eu) eu/stability pact

Timothy Kirkhope worried about Britain's budget deficit which should lead to formal action from Commission

Brussels, 10/01/2006 (Agence Europe) - With the European Commission about to make a statement on Wednesday on the UK's excessive budget deficit, MEP Timothy Kirkhope, (Conservative, UK), has denounced Chancellor of the Exchequer Gordon Brown's management. In a press release published on Tuesday, Mr Kirkhope said, “The Chancellor spins himself as a prudent man but even the European Commission is showing him up as a reckless spender. Mr Brown can just about get away with spending more than Britain earns whilst the economy is growing but he is lining us up for a hard knock if growth begins to slow down”. With no exceptional circumstances and growth of 2.3% in 2006 (against 1.6% in 2005), the Commission is likely to conclude that there is an excessive budget deficit in the UK, with borrowing reaching 3.2% of GNI in the financial years to March 2004 and March 2005 and expected to rise to 3.4% in 2005-2006 (for the Commission's autumn perspective, see EUROPE 9070). In 2003, the budget deficit had already breached the EU's Stability and Growth Pact ceiling of 3% so this deficit cannot therefore really be termed temporary. However, since the United Kingdom is not part of the euro zone, only the initial recommendations of the excessive deficit procedure apply.

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