Italy yesterday became the latest country in the eurozone to be ordered to bring its budget deficit in line with European rules or face punishment

The European commission issued its call to Silvio Berlusconi as unprecedented court proceedings began over whether EU member states can be forced to follow the stability and growth pact. "I trust the early warning will be complied with by the Italian authorities," said the new commissioner for economic and monetary affairs, Joaquin Almunia. Mr Almunia has replaced his countryman Pedro Solbes, who is now back in Madrid as deputy prime minister and finance minister in the new socialist government. The commission said Britain and the Netherlands had both breached the pact's limit of 3% of gross domestic product in 2003, but recommended no action since both were coming back into line. In Britain, any excess was likely to be "small and temporary", it said. The UK is subject to the same review mechanism despite being outside the eurozone. British officials said the UK had been merely "stroked across the knuckles". Italy, the eurozone's third largest economy, was castigated for "significant slippage" in its projected 2004 deficit, now seen as hitting 3.2% of GDP. Its budget would have to be slashed by nearly €7bn in 2005 to check this. The Brussels rebuke was rejected by Rocco Buttiglione, Italy's European affairs minister. "Probably a friendly approach would have had a more certain and efficient impact," he said, suggesting that Romano Prodi, the commission president, was biased. Mr Prodi is expected to challenge Mr Berlusconi in the next general election in Italy.