Stability and convergence programmes are prepared by Member States to present their medium term budgetary strategy.
Last update 25/6/2009.
Submission of the programmes
Under the provisions of the preventive arm of the Stability and Growth Pact (SGP) euro-area Member States prepare annual stability programmes and other EU Member States prepare convergence programmes and submit them to the Commission and the Council normally by 1 December of each year. The aim is to ensure more rigorous budgetary discipline through surveillance and coordination of budgetary policies within the euro area and EU.
Stability and convergence programmes contain the following information:
- a medium-term objective (MTO) representing a budgetary position that safeguards against the risk of breaching the 3% of GDP threshold of the Treaty and ensures the long-term sustainability of public finances, the adjustment path towards the MTO (the year-by-year target figures until it is achieved) and the expected path of the debt ratio;
- the underlying economic assumptions (growth, employment, inflation and other important economic variables);
- a description and assessment of policy measures to achieve the programme objectives;
- an analysis of how changes in the main economic assumptions would affect the budgetary and debt position;
- the medium-term monetary policy objectives and their relationship to price and exchange rate stability (for non-euro-area countries only);
- the information provided covers the preceding and current year and at least three years ahead.
Examination and monitoring of the programmes
The Council examines the programmes at the beginning of each year and delivers an opinion on each Member State's programme, based on assessments by the Commission and the Economic and Financial Committee (EFC). The focus is on the following issues:
- are the economic assumptions realistic?
- does the medium-term budgetary objective in the programme provide for a safety margin to ensure the avoidance of an excessive deficit and is the adjustment path towards it appropriate?
- are the policy measures sufficient to achieve the medium-term budgetary objective?
- what risks does the ageing of the population pose to the long-term sustainability of public finances?
- are the economic policies consistent with the broad economic policy guidelines?
On the basis of this analysis, the Council opinion may suggest policy action to be taken by the country in question.