Government to discuss 2006 budget deficit

The government is expected on Wednesday to discuss a plan to trim the 2006 budget deficit to four percent of GDP, gross domestic product, with an eye toward meeting the Maastricht criteria in 2008 and adopting the EU currency, the Euro, before the end of the decade. Under the terms of the EU's "Stability and Growth Pact," governments cannot run a budget deficit greater than 3 per cent of GDP, nor can they have a debt ratio of more than 60 per cent of GDP. Thanks to taking on unusually high "one-off" loan guarantees, the Czech Republic last year posted a 12.9 per cent budget deficit as a percentage of GDP — the largest of any EU country. This year it is likely to be 6 per cent.

Author: Brian Kenety