The announcement follows agreement by EU finance ministers on Tuesday to start withdrawing fiscal support to the economy from 2011 at the latest as the recovery takes a firmer hold.
Economic and Monetary Affairs Commissioner Joaquin Almunia said cutting the deficits, inflated by the worst economic crisis since World War Two, was needed to prevent a rise in long-term interest rates that would raise the debt servicing costs.
"I believe the deadlines proposed today are appropriate and realistic," Almunia said in a statement.
The Commission expects the aggregate budget deficit in the euro zone to jump to 6.4% this year and 6.9% next year from 2.0% in 2008 - more than twice the EU limit of 3% of gross domestic product.
This will boost eurozone debt to 78.2% of GDP this year, 84% in 2010 and 88.2% in 2011 in a trend that could undermine the value of the shared euro currency.
2013 deadline for Germany and France
The EU executive gave Germany, France, Spain, Austria, the Netherlands, the Czech Republic, Slovakia, Slovenia and Portugal until 2013 to bring their deficits below the 3% EU limit.
Ireland and Slovakia said they would meet the deadline. "Slovakia considers the 2013 date [...] as adequate," the finance ministry said in a statement.
Germany said on Tuesday it would have a deficit below 3% in 2013, but France said 2013 would be very difficult and reducing the shortfall below 3% in 2014 would already be an achievement.
Almunia told a news conference it was very important that both France and Germany should move together on fiscal policy.
"It is extremely important that Germany and France both share the same orientations of their fiscal polices," Almunia told a news conference.
"That is not to say that France should have exactly the same policies as Germany [...] but both economies should have coherence in the respective economic and fiscal strategies, because if not, economic policy coordination and economic governance in Europe is impossible," he said.
More time for France, tougher action for Greece
Italy and Belgium got until 2012, Ireland until 2014 and Britain until the fiscal year 2014/15. To reach these goals, which have yet to be approved by EU finance ministers, who meet on 1-2 December, governments will have to make deep budget gap cuts every year.
The Commission asked Germany and Italy to cut their deficits by 0.5% - the EU benchmark. Austria, the Netherlands, Belgium and Slovenia should cut by 0.75% a year, while Slovakia and the Czech Republic by 1%.
Portugal and France will have to reduce their shortfalls by 1.25% every year, Spain and Britain by 1.75% and Ireland will have to slash the gap by 2% annually.
The new deadlines give France, Britain, Ireland and Spain an extra year for the deficit reductions.
This is because they took effective action to cut deficits as requested by EU finance ministers in April, but bad economic conditions made it impossible for them to meet the targets.
Greece did not take action as asked by EU finance ministers, the Commission said. It proposed raising the EU's disciplinary budget procedure against Athens to one level before fines.
"No effective action has been adopted," Almunia said. "This will trigger, if the Council [of EU ministers] will endorse our position next month, in a couple of months new recommendations under the next step in the excessive deficit procedure."
"The Greek economy and public finances have very serious problems, have to face very serious challenges," he said.
Almunia has said the Commission will propose a deficit deadline for Greece in the next two or three months.
"Greece needs strong structural adjustments. Greece needs a very ambitious and determined fiscal consolidation strategy over the medium-term and very crucial institution reforms to be able to deliver structural and fiscal adjustments," he said.
Almunia said the Greek budget overruns were not only a problem for Greeks, but for the single currency area as a whole, because the 16 countries in it shared the euro. "It is a question of common concern for the euro area," he said.
(EurActiv with Reuters.)