European Union (EU) finance ministers warned Poland on Tuesday that its efforts to rein in its excessive budget deficit was "inadequate."

The finance ministers noted in a decision that although there has been an improvement in Poland's fiscal position, but action taken by Poland is proving to be inadequate for bringing its government budget deficit within the EU limits by 2007.

The EU's stability and growth pact requires member states to maintain its deficit below the maximum threshold of 3 percent of gross domestic product (GDP).

The draft budget of Poland for 2007 sets the deficit at 3.7 percent, including the costs of pension reform, but the European Commission, EU's executive body, forecast that it may turn out slightly higher, standing at 4 percent of GDP.

Under a transitional arrangement, Poland now can exclude the costs of pension reform from its deficit accounting, but the arrangement will expire on April. 1, 2007.

The EU finance ministers' decision follows an earlier recommendation by the European Commission to the European Council.

Source: Xinhua