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Power struggle ahead as Berlin rejects Commission's demands

The gloves are off in the spat between Brussels and Berlin over Germany's economy.

As expected, the European Commission - after a lengthy and apparently divisive meeting yesterday - issued a demand for Germany to make a further six billion euro spending cuts next year.

Berlin will also have to draw up detailed plans outlining how it intends to implement these cuts by 9 January 2004.

But Germany - like France - will be given an extra year to comply with the euro rules.

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