Italy and Portugal are the latest member states set to test the Commission's resolve in dealing with errant countries when it comes to the newly revamped Stability and Growth Pact.
Portuguese Finance Minister Luis Campos e Cunha has announced belt-tightening measures to bring its deficit under control. Measures being considered include new highway tolls, higher sales taxes and cuts to civil service benefits.
Following three technical decisions by Eurostat, Italy's government deficit is now provisionally set at 3.1% of GDP for 2003 and 3.1% of GDP for 2004. Eurostat is awaiting further information from the Italian government on issues such as the recording of transactions with the EU budget and statistical discrepancies in government accounts. These may lead to an upward revision of the deficit between 2001 and 2004.