March, 20 2005	Sunday	09 Safar 1426

BRUSSELS, March 19: The cumulative spending deficit of the 12 eurozone countries fell slightly last year to 2.7 per cent of output from 2.8 per cent in 2003, the EU’s statistics arm Eurostat said on Friday. The ratio of debt carried by these countries to their gross domestic product rose to 71.3 per cent from 70.8 per cent in 2003. The data was published before a weekend of tense talks over budget rules laid down first in the Maastricht Treaty that prepared the way for creation of the euro, and then developed in the Stability and Growth Pact. Eurostat also said that in all 25 countries of the European Union the accounts showed a cumulative public deficit of 2.6 per cent from 2.9 per cent in 2003, but that the debt had risen to 63.8 per cent of output from 63.3 per cent. The data was based on information provided by the 25 countries, Eurostat said. The rules to underpin the euro were intended to ensure that countries achieved ever-greater convergence of key indicators in their economies. They state that individual eurozone countries must not have a deficit exceeding three per cent of output and should aim for a surplus in times of growth, and that debt should be less than 60 per cent of output or falling sustainably towards that figure.

France, Germany, Greece and Italy in particular are having difficulty meeting these requirements.

France and Germany have run excessive deficits for a number of years but ministers have decided not to apply penalty procedures.

The ministerial talks beginning this weekend concern pressure from some countries, and notably those in difficulties with the rules, to reform and relax both the rules and the procedures of the Stability and Growth Pact, a strategy strongly opposed by some small countries which have strengthened their public finances.

The public deficit, or general budget deficit, under the Maastricht definition, comprises deficits or surpluses on the central government budget, social welfare budget and local authority budgets.—AFP