The European Commission welcomed on Sunday an agreement by Belgian parties on the country's 2012 budget, which cuts the deficit to levels required by the European Union, and urged a quick implementation of the remaining formalities.

Belgian parties, under chief negotiator Elio Di Rupo, reached a deal on the 2012 budget on Saturday after ratings agency Standard & Poor's downgraded Belgium on Friday citing, as one of the reasons, uncertainty over the country's funding.

I welcome the agreement presented by Mr Elio Di Rupo today on the measures to underpin the Belgian federal budget with the aim of bringing the general government deficit to 2.8 percent of GDP in 2012, as recommended by the EU Council, and of paving the way for further consolidation in 2013 and 2014, Rehn said.

Mr Di Rupo's announcement that the budget law should be worked out very soon is equally important, as it should provide for a swift and full assessment by the European Commission under the excessive deficit procedure, Rehn said.

Under EU law, countries which have a deficit larger than the EU threshold of 3 percent of gross domestic product are placed under a disciplinary excessive deficit procedure, which, under rules that will enter into force next month, could quickly lead to financing sanctions.

(Reporting By Jan Strupczewski)