Germany and France have been publicly rapped on the knuckles by the European Commission over their budgets

This is because of projections that Berlin will exceed EU deficit limits this year and Paris risks doing the same next year. Monetary Affairs Commissioner Pedro Solbes downplayed having launched disciplinary action, saying the EU executive had seen this coming; 'our policy system is really quite together,' he said in Brussels. 'If it weren't, monetary matters would face problems.' Germany's deficit is forecast at 3.8 percent of GDP this year, 3.1% next year; the outlook for France is 2.7 percent and 2.9 percent. Three percent is the limit. The Commission's moves showed it is serious about enforcing the euro zone's Stability and Growth Pact rules, in spite of economic slowdown and anticipation of a slight rise in unemployment. Germany faces the more serious charge; the ultimate sanction of the discipline process is a heavy fine. The punishment is designed to deter states from jeopardising monetary union by free-and-easy spending. German Finance Minister Hans Eichel admitted he was in for a tough time. Berlin's looming tax revenue shortfall poses an extra challenge for him.