We're now going to have to consider making a comment regarding the negative development of the budget of a big country

Didier Reynders, Belgian Finance Minister

But Belgian Finance Minister Didier Reynders was quoted in a Belgian newspaper as saying he wanted the Eurogroup to send a message to a "large country" about its deteriorating budget position.

The budget deficit ratio in Germany, Europe's largest economy, is the worst in the eurozone.

If the current economic slump deepens even further, Germany might see its deficit rise above 3.0%, economists suggested.

Budget revised

The cabinet is believed to approve country's updated budgetary stability programme on Wednesday.

This programme foresees a "possible alternative scenario in case... the economy gets worse", the German finance ministry confirmed.

The programme assumes 1.25% growth in economic output, or GDP, for 2002 as a base scenario.

The government's existing budget goals are for a deficit of 1.5% of GDP this year, falling to 1.0% in 2002.

Last week Germany revised upwards its deficit ratio forecasts to 2.5% this year and 2.0% in 2003.

The European Commission, which assumes the German economy will only grow by 0.7% in 2002, has forecast the country's budget deficit rising next year to 2.7% of GDP.

The Maastricht Treaty stipulates that euro-zone governments are not allowed to run up deficits equivalent to more than 3.0% of GDP.

Officially, Germany has promised to achieve a balanced public budget, which comprises the federal, regional and municipal budgets, by 2004.

But with unemployment in Germany rising inexorably higher and growth prospects growing dimmer by the day, economists doubt whether Berlin will be able to stick to its self-imposed regime of budgetary rigour.

With parliamentary elections looming next year, rising unemployment could jeopardise the government's chances of re-election.