The Commission decision, which was announced on Wednesday, means eight EU countries including Germany and France will have until 2013 to bring their spending back under control and reduce their budget deficits to within three percent of gross domestic product (GDP).

EU Commissioner for Economic and Monetary Affairs, Joaquin Almunia, said he thought the deadline was "fitting and realistic".

The decision came as no surprise to Germany, which is expecting a five percent hole in it budget next year. Earlier this week, German Finance Minister Wolfgang Schaeuble, told Almunia that Berlin would comply with EU targets, even though that will make it harder to push ahead with a reform of the German tax system.

Almunia, who described Schaeuble's agreement as "extremely credible", said he believed the German finance minister would find a way to harmonize planned tax cuts with the austerity measures necessary to meet the Commission's 2013 EU spending deadline.

French malcontent

Germany is not the only country to be told by Brussels to put a lid on its outgoings. Italy and Belgium have until 2012 to fall back in line with the three percent rule stipulated under the EU Stability and Growth Packet.

Spain and France were also set a 2013 deadline, although Paris has repeatedly said it is unrealistic. Speaking in Brussels on Tuesday, French Finance Minister Christine Lagarde said that, while 2015 was too late, 2012 was clearly too soon.

"Between the two, there is 2013 and 2014," Lagarde said. "It is obvious that 2014 already represents a fine effort - I think 2013 will be extremely difficult."

Tailor-made deadlines

But 2013 is the date the Commission has set for Paris. Italy and Belgium have until 2012 to get their books in order, while Ireland has been granted until 2014 and Britain, which has suffered particularly badly as a result of the recession, until 2015.

The Commission's suggestions have to be accepted by finance ministers, and countries which do not meet the targets risk hefty fines. Greece is now inching closer to that point.

On Wednesday, Almunia proposed a tougher stance towards Athens, which he said had not taken any "effective steps" towards reducing its budget deficit or finding a balance in the Greek economy.

tkw/AP/dpa/AFP

Editor: Susan Houlton