The European commission will next week raise the chancellor’s hackles by setting the Treasury a deadline of just 15 months to bring the government’s budget deficit under control in a fresh row over Britain’s deteriorating public finances.
The chancellor, an arch-critic of mainland European economic policies and performance, will round on his growing domestic and overseas critics when the European Union’s 25 ministers meet to discuss the UK deficit on January 24.
The strict deadline for bringing the deficit below the 3% limit set by the Maastricht treaty will be adopted by the commission on Wednesday. Brussels no longer believes the government’s “excessive” spending and borrowing is temporary.
According to a draft recommendation circulating yesterday, “the UK authorities should put an end to the present excessive deficit situation as soon as possible and by financial year 2006-2007 at the latest”.