The European Commission

has issued its verdict on the budgets of euro zone countries for the first time, warning that some of the bloc's largest economies, including Spain and Italy, were in danger of breaching European deficit targets for 2014.

Under new rules that came into force this year, all euro zone countries must submit their draft national budgets to Brussels before final sign off by national parliaments.

In its budgetary opinions published yesterday, EU commissioner Olli Rehn said Spain, which is targeting a deficit of 5.8 per cent of GDP next year, may not achieve that. Italy, which has a relatively low deficit but one of the highest debt-to-GDP ratios in the EU, was warned that its budgetary plans may not be sufficient to meet its budget deficit target of 2.5 per cent next year.

Finance ministers will review the budget plans at next Friday’s euro group meeting.