Concerned about the effect on the stability of the eurozone, the commission is proposing deadlines for complying with the cap. All five - France, Greece, Ireland, Spain and the UK - already posted deficits above the 3% limit last year.

Ireland is asked to bring its budget deficit into line by 2013. France and Spain by 2012. Greece should take steps to get its deficit back under control in 2010. And the deadline for the UK would be 2013-14.

EU leaders have the final say on the proposed deadlines.

Deficits have swelled amid sharp declines in tax revenues and increases in social spending such as unemployment benefits. Governments, meanwhile, are reaching into state coffers to stoke growth and investment and fight the worst economic slump since World War II. In all, EU countries are pumping an estimated 3.3% of the EU’s GDP, or roughly €400 billion, into the economy over two years.

Under EU rules, current and potential eurozone members must keep their budget deficits below 3% of GDP. The rules - part of the EU’s stability and growth pact – prevent imbalances that could undermine confidence in the eurozone.

Being outside the eurozone, the UK is not bound by the rules but tries to respect them.

The commission forecasts of last January budget shortfalls this year of more than 5% in France, nearly 6% in Spain, 11% in Ireland, and at least 9% in the UK. The shortfall in Greece, which dates back to 2007, was 3.7% in 2008 and is expected to remain above the limit this year.

The commission also urged more restraint in Cyprus, warning the shortfall could grow rapidly there in coming years. Cyprus is expected to post a 1% deficit this year, following implementation of its economic stimulus package.

EU leaders have voiced concern about growing budget gaps. At their March summit, they said EU countries should return as soon as possible to deficits “consistent with sustainable public finances”.