Tuesday's meeting of EU finance ministers in Brussels was expected to focus on ways and means of cutting national budget deficits without jeopardizing a fragile economic recovery in parts of the bloc.

The EU's 27 member states also planned on coordinating exits from crisis-related emergency measures in order to avoid distortion of competition.

The meeting came a day before the European Commission was set to unveil how much time would be given to individual member states to comply with EU budget deficit rules.

Most EU members states are expected to post budget deficits this year that are well in excess of the three percent of gross domestic product stipulated by the bloc's stability and growth pact.

The Commission, which is the EU's budgetary watchdog, is expected to give Germany a 2013 deadline to push its budget deficit below the three percent threshold.

"Reducing the deficits between 2011 and 2013 corresponds exactly to our ideas," German Finance Minister Wolfgang Schaeuble said on arrival for Tuesday's meeting in Brussels.

According to German Chancellor Angela Merkel, Germany will see a budget deficit of 3.5 percent this year and about 5 percent in 2010, accompanied by rising unemployment.

But Merkel's government is confident that tax cuts over the next four years will trigger sufficient growth in Europe's largest economy, enabling Berlin to rein in the budget deficit in due time.

German optimism fails to impress

However, not all EU states share Berlin's optimism, and French diplomats were quoted as saying that it would be "very difficult" for Paris to meet a 2013 deadline.

France is anticipating an 8.5 percent budget deficit in 2010 and is aiming at reducing this to 5 percent by 2013 – a move which French budget minister Eric Woerth described as already constituting a "considerable effort."

And there are other member states who will have even greater difficulties in regaining control over their finances. Greece's budget deficit is estimated at around 12 percent of its GDP, while Ireland's is pushing 15 percent.

Brussels is entitled to slap heavy fines on EU member states that flout the growth and stability pact. However, in the current economic situation such measures could prove counterproductive.

The Commission has voiced concern over EU members' continued fiscal stimuli that have been passed freely since the beginning of the financial and subsequent economic crisis in 2008/2009.

In a bid to assuage those concerns, EU finance ministers have already agreed in principle to axe the costly fiscal stimuli in 2011. However, this is based on the assumption that economic growth reaches sustainable levels by then.

Last week, the Commission published new forecasts reinforcing the view that Europe will emerge from recession in 2010 and that economic growth will be consolidated in 2011.

nk/dpa/AFP/AP/Reuters

Editor: Susan Houlton