Ue adopted new recommendations to correct Greece’s budget deficit and improve the competitiveness of its economy.

The commission endorsed Greece’s plan for slashing its double-digit budget deficit, announcing its verdict a day after the country promised more action.

The commission also launched infringement proceedings against Greece for sending false debt data. The country finished 2009 with a budget shortfall close to 13% of gross domestic product, far more than it had predicted.

Worries about Greece's finances have put pressure on the euro and raised fears of a debt crisis that could impact the whole 16-nation eurozone.

Last month the new Greek government outlined a package of spending cuts and tax-boosting measures to bring the deficit under 3% of GDP, the EU limit.

The plan, which includes sweeping public sector cuts, sets deficit targets of 8.7% of GDP in 2010, 5.6% in 2011 and 2.8% in 2012. On Tuesday the Greek government announced more measures to reduce the shortfall, including a broader freeze on public wages and higher fuel taxes.

Welcoming the last-minute pledges, the commission asked Greece to provide more specifics in the coming weeks, including a timetable for measures planned this year.

Economic affairs commissioner Joaquín Almunia said that Greece has adopted an ambitious programme to correct its fiscal imbalances and to reform its economy. He underlined also the Commissions' full support of Greece in this difficult task.

Twenty of the EU’s 27 nations are running deficits above the 3% threshold after the deepest global recession since the 1930s wreaked havoc with public spending.

The EU’s stability and growth pact – the agreement between member countries to coordinate national fiscal policies – requires current and potential eurozone members to keep their public finances sound.

When a country exceeds the limit, EU finance ministers issue recommendations for reducing the shortfall. Laggards could face penalties and more difficult access to loans from the European Investment Bank.