WARSAW, Nov 14: Fiscal deficits in new EU members from central and eastern Europe are set to rise this year with the biggest newcomers particularly reluctant to pay the political price for spending cuts, the EBRD said on Monday.
The European Bank for Reconstruction and Development, the development bank for the former Soviet bloc, said in its annual transition report that of the eight countries that joined the EU last year, only Poland and Slovakia bucked the trend.
Poland is expected to report a budget shortfall of 3.7 per cent of gross domestic product this year, down from 3.9 per cent in 2004 while Slovakia’s deficit is seen stabilising around 3.3 per cent.
The Czech Republic and Hungary are set to move further away from the limit of 3 per cent of GDP required to join the eurozone.—Reuters
