BRUSSELS, Nov 3 (Reuters) - Euro zone budget gaps will rise over the next two years because of the sharp economic slowdown, but only a few countries will break the European Union limit of 3 percent of GDP, the European Commission said on Monday.
In its twice-yearly economic forecasts for the 27-nation bloc, the EU executive arm said the aggregate budget deficit for the 15 countries in the euro zone would more than double to 1.3 percent this year, and rise to 1.8 percent in 2009 and 2.0 percent in 2010.
"Most countries will be affected although with significant differences," the Commission said. "Uncertainties over the fiscal implications of the financial rescue packages also cloud the fiscal outlook," it said.
Ireland, whose economy will contract this year and next, will see the biggest increase in the deficit to 6.8 percent next year from 5.5 percent seen this year and 7.2 percent in 2010.
France, which has been warned by the Commission earlier this year it needed to do more to bring its deficit down, is expected to have a budget gap of 3.0 percent this year and 3.5 percent in 2009, rising to 3.8 in 2010.
In 2010 Spain and Portugal would also breach the 3 percent limit with deficits of 3.2 and 3.3 percent respectively unless policies change. Greece will touch the limit with a 3 percent gap.
Other euro zone countries will stay safely below the 3 percent limit despite the economic slowdown and some, like Italy and Slovenia, are even likely to improve their budget balance in 2010 after a slight deterioration in 2009, the Commission said. (Reporting by Jan Strupczewski, editing by Mark John)
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