EU urges Prague to cut its public finance deficit down to EU limits


The Czech Republic has failed to take the necessary steps to cut its deficit in public finances down to EU limits, the European Commission said on Wednesday, urging Prague to increase its efforts. The European Union launched legal action against the Czech Republic in 2004, giving the country until 2008 to bring its deficit into line with an EU limit of three percent of GDP. Although the deficit was brought down to 2.9 percent last year, it is expected to balloon again this year due to higher spending. The government's current budget plans foresee reducing the deficit to 3.2 percent in 2009 even though the country is enjoying stronger-than-expected economic growth and equally robust tax revenues.