February 12, 2003	Wednesday	Zul Hijjah 10, 1423

BERLIN, Feb 11: The German Finance Ministry said on Tuesday there were no plans yet at European level to relax budgets in case of a war with Iraq but implicitly confirmed it was thinking about how to adapt fiscal targets to weak growth.

“We are not talking at the moment about weakening or reinterpreting the Stability and Growth Pact but how to adapt it to the current economic situation,” a finance ministry spokesman said.

“This applies also to...the possibility of an Iraq war, but crisis planning is not at the moment the central scenario,” he added.

He said German Finance Minister Hans Eichel would hold discussions with Britain and France about how to boost growth in the EU. “The path of budgetary consolidation will play a central role,” the spokesman said.

The spokesman noted the stability pact allows annual budgetary targets to be softened in case of weak growth, citing last year, when Germany let its budget deficit rise to 3.7 per cent of gross domestic product (GDP) to cushion a slowdown.

The German economy grew 0.2 per cent last year, its slowest rate in nine years.—Reuters