The EU executive commission determined Wednesday that efforts by Greece and Hungary to control public spending had been insufficient and urged European Union finance ministers to approve disciplinary action against the pair.

A commission decision to carry on with procedures targeting EU members that fail to hold their public deficits to three percent of output was seen here as a demonstration of resolve in contrast to leniency shown to France and Germany.

But the commission's determination to crack down on Greece and Hungary must be endorsed by EU finance ministers, who will debate the question at a meeting here January 17 and 18.

EU Economic Affairs Commissioner Joaquin Almunia predicted that the ministers would back the commission's call, which he said was based on compelling arguments.

The panel said in a statement Wednesday it had concluded that "Greece's budgetary situation has deteriorated further in 2004 despite having the highest economic growth in the euro area" and was in contradiction to recommendations issued by EU finance ministers last July.

It added that Greece now expected the shortfall in its public finances to amount to 5.3 percent of gross domestic product this year rather than the three percent foreseen in March. Prospects for meeting the target in 2005 were also deemed to be dim.

Almunia denied that the commission had been harder on Greece than on France and Germany, against whom excess deficit procedures were suspended last week Many analysts nonetheless predict that Germany will have a difficult time keeping its public deficit next year to under three percent.

When the commission last year called for action against Paris and Berlin, the initiative was halted by the finance ministers, a decision that was later overturned by the European Court of Justice.

If the ministers meeting in January adopt the commission's position on Greece, the executive will then put forward precise budgetary recommendations that Athens would have to implement or face financial sanctions.

In Athens Wednesday Greek Finance Minister George Alogoskoufis stressed that the 2005 budget, expected to be voted on later in the day by parlianment, aimed to slash the public deficit to 2.8 percent.

The EU commission likewise faulted Hungary for having inadequately applied measures recommended by the ministers in July to hold its 2004 deficit to 4.6 percent of gross domestic product.

In addition, the commission noted, Budapest authorities had revised their 2005 deficit target to 4.7 percent of GDP from 4.1 percent. Finance ministers had suggested that Hungary, which joined the EU last May, bring its deficit in line with Stability and Growth Pact regulations in a "multi-annual" framework between now and 2008.

But Hungary, which is not yet a member of the eurozone, would not face financial penalties.

The commission also Wednesday decided to drop further measures against the Czech Republic, Cyprus, Malta, Poland and Slovakia, each of which formally joined the European Union last May, after determining that they had complied with recommendations from the finance ministers and were "on track for correcting the situation of excessive deficit."