In a new Working Paper the economists at Allianz Group and Dresdner Bank put the spotlight on the budget drafts for 2005 presented by the French, Italian and Spanish governments. In the economists‘ view, France’s public sector deficit ratio next year will ease down closer to the 3 % mark, helped by a robust economy and a one-off effect, but at 3.2 % will still be marginally above the Maastricht limit.
Fiscal agendas for 2005 in Germany‘s big EMU partner countries
In Italy the new general cap on spending is likely to produce greater savings than the usual efforts to cut spending in individual ministries. Nonetheless, the deficit looks set to climb to around 3 1/4 % of GDP. Spain remains on the path of virtue, with an estimated deficit of only 0.3 % of GDP. But, with an eye on plans to step up spending, the economists warn that Spain would be well advised to save for rainier days.