The European Commission today examined the updated stability and convergence programmes (SCPs) of Belgium, Bulgaria, Germany, Estonia, Ireland, Spain, France, Italy, the Netherlands, Austria, Slovakia, Sweden, Finland and the United Kingdom.
According to Council Regulation (EC) No 1466/97 on the strengthening of budgetary surveillance and the surveillance and coordination of economic policies, Member States must submit updated macroeconomic and budgetary projections every year. Such updates are called stability programmes in the case of countries that have adopted the euro, and convergence programmes otherwise. This regulation is also referred to as the 'preventive arm' of the Stability and Growth Pact.
This year's assessments have to be seen against the background of the sharp economic and financial crisis which has had a major impact on public finances. Reflecting the working of automatic stabilisers and discretionary stimulus measures implemented in line with the European Economic Recovery Plan (EERP) to cope with the exceptional economic circumstances, a large majority of Member States is currently subject to the excessive deficit procedure following corresponding Council decisions in 2009. This implies that the medium-term budgetary strategies of these countries have to be assessed against the background of the recommendations to correct their excessive deficits by the deadlines set by the Council.
Of the countries assessed today, only Bulgaria, Estonia, Sweden and Finland have managed to keep their general government deficits in 2009 below the 3% of GDP reference value set in the Stability and Growth Pact. For 2010, the programmes of Sweden and Finland foresee a temporary break of the reference value. For the majority of the fourteen programmes, the growth assumptions underlying the budgetary projections are assessed as rather optimistic, implying that budgetary outcomes might be worse than targeted. Furthermore, in several cases, the budgetary consolidation strategy is not sufficiently backed up by concrete measures from 2011 onwards.
Based on its assessment, the Commission has adopted recommendations for Council opinions on the programmes which, together with recommendations for Council opinions on the programmes of ten further countries, will be discussed at the forthcoming ECOFIN meeting on 16-17 April.
>> Press release IP/10/288. Commission assesses stability and convergence programmes of fourteen EU Member States