Mr Almunia has welcomed the work undertaken by all four countries

Economic and Finance Commissioner Joaquin Almunia said Germany, France and Greece should achieve the goal this year, with Italy following in 2007.

Under eurozone rules, nations must keep their deficits below 3% of their gross domestic product or else face fines.

The 3% rule aims to ensure the euro is not undermined by over-spending states.

As eurozone economic growth has struggled in recent years, a number of member state governments have found it difficult to control the gap between their revenues and expenditure.

However, with eurozone growth picking up this year government's finances have improved, reducing the chances of financial penalties from the European Commission.

Italian targets

Mr Almunia said he backed budget plans outlined on Monday by Italian Finance Minister Tommaso Padoa-Schioppa that aim to raise 1.1bn euros ($1.4bn; �743m).

"If this budget is implemented as the government intends to implement it, Italy can end 2007 with a budget [deficit] below 3%," said Mr Almunia.

The Italian government aims to bring its budget deficit down to 2.8% of GDP next year from an expected 4.8% in 2006.

Greece's deficit is predicted to fall below 3% this year from 2005's 4.5%.

Mr Almunia said Germany is now predicting a deficit of 2.6% this year, and the final figure could be even better.

France's deficit is also now expected to fall below 3% of GDP this year, and stay below in 2007.

Finance ministers from all 25 EU nations are meeting later on Tuesday, and are expected to formally approve German and British efforts to cut their deficits this year.

Although the UK is not a member of the eurozone, Chancellor Gordon Brown aims to keep Britain in line with the 3% rule.