UPDATE 1-EU sets deadlines for post-crisis deficit cuts

                                
 (Adds news conference after meeting)
                                
 By Jan Strupczewski
                                
 BRUSSELS, Dec 2 (Reuters) - European Union finance ministers
fixed deadlines on Wednesday for slashing budget deficits in
half of the 27-country bloc, flagging the first move towards
exiting fiscal stimulus as the economy emerges from recession.
                                
 They set deadlines between 2012 and 2014/15 for 13 countries
to slash budget gaps to below the EU ceiling of 3 percent of
gross domestic product as proposed by the European Commission in
November under EU budget rules, the Stability and Growth Pact.
                                
 For a factbox on the prescriptions, click on
[ID:nGEE5AO1HJ].
                                
 "This will call for very difficult actions in all the member
states eventually when we start to implement the exit strategies
of fiscal policy," Swedish Finance Minister Anders Borg, whose
country holds the EU presidency, said.
                                
 "But it is a major step forward that we have had this
discussion in a very good spirit and we now can see the outlines
of an exit strategy for fiscal policy," he told a news
conference after the ministers held talks in Brussels.
                                
 The ministers also agreed that Greece had not taken
effective action to reduce its deficit in line with their
previous recommendations. 
                                
 That paves the way towards stepping up disciplinary action
in February against Athens to the last level in a multi-stage
procedure that ultimately can lead to sanctions, but never has.
                                
 France, the euro zone's second-biggest economy, secured a
marginally slower annual pace for its cuts than recommended by
the European Union's executive Commission while accepting the
overall deficit reduction deadline of 2013.
                                
 EU governments have been pouring billions of euros into
their economies to help limit the worst economic crisis since
World War Two, inflating deficits to sometimes more than four
times the EU limit.
                                
 Cutting the deficits is deemed necessary to prevent a market
crisis of confidence in EU government debt policies and an
increase in long-term interest rates that would raise
debt-servicing costs.
                                
 The ministers gave Germany, France, Spain, Austria, the
Netherlands, the Czech Republic, Slovakia, Slovenia and Portugal
until 2013 to bring their deficits below 3 percent.
                                
 The deadline for Belgium and Italy is 2012, for Ireland 2014
and for Britain the fiscal year 2014/15. A new deadline for
Greece will be set together with the stepping up of disciplinary
action, called an excessive deficit procedure.
                                
 EU finance ministers have already agreed to start
withdrawing fiscal support to the economy from 2011 at the
latest as the recovery takes a firmer hold and said many
countries would have to start consolidating earlier.
                                
 The Commission expects the aggregate budget deficit in the
16-country euro zone to jump to 6.4 percent this year and 6.9
percent next year from 2.0 percent in 2008. 
                                
 This will boost euro zone debt to 78.2 percent of GDP this
year, 84 percent in 2010 and 88.2 percent in 2011 in a trend
that could undermine the value of the shared euro currency.
 (Reporting by Jan Strupczewski, editing by Dale Hudson and
Brian Love) 
 ((jan.strupczewski@reuters.com; +32-2-287 6837;
Reuters messaging: jan.strupczewski.reuters.com@reuters.net))