EC advises steeper cuts in public spending

The EC has advised the Czech Republic to work on cutting its public spending deficit to below one percent of the GDP by 2012. In its annual report on member states finances the EC says that a gradual reduction of the Czech Republic's steep budget deficit is essential for paving the way to the adoption of the single currency. It has recommended a budget deficit below three percent of the GDP in 2008. The centre-right Czech government says that this is a realistic target. However the country has had problems fulfilling its commitments in the past. This year's budget deficit is expected to be around 3.6 percent of the GDP although the country had pledged not to exceed 3.3 percent.