21.   Investors expressed little concern about the possibility both countries would miss the deficit target.

22.   Last year, he used the occasion to announce a new deficit target.

23.   Meantime, Bundesbank council member Hans-Juergen Koebnick said monetary union should be started on time even if France and Germany miss the deficit target.

24.   Most analysts say France has a good chance of meeting the deficit target, and is certain to be comfortably under the limit on total debt.

25.   Now, with Prime Minister Romano Prodi pushing through one austerity budget after the next, Italy is within striking distance of the deficit target.

26.   Separately today, the European Union forecast that Italy, Belgium and Greece are mostly likely to miss the deficit targets for inclusion in the proposed European monetary union.

27.   Since politicians in both countries have pledged to proceed with monetary union as planned, missing deficit targets could mean a weaker single currency.

28.   Still, a European Commission report also released today predicted Germany and France will meet the deficit target, while Italy will miss it.

29.   Still, the IMF will probably approve more flexible deficit targets for the second half, said Carlos Rodriguez, chief advisor to Economy Minister Roque Fernandez.

30.   That eased fears that social unrest will prevent France from keeping to deficit targets.