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Public finances in EMU - 2005

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Public finances in EMU - 2005 pdf (3 MB) Choose translations of the previous link 

Communication from the Commission to the Council and the European Parliament COM(2005) 231 final defr pdf (177 kB) Choose translations of the previous link   

The Communication on Public Finances in EMU 2005 summarises the main policy messages of the yearly Public Finances in EMU report prepared by Directorate General for Economic and Financial Affairs.

The Commission calls on Member States to live up to their renewed commitment to sound budgetary policies and pledges to implement forcefully the reformed Growth and Stability Pact. The report shows that the average budget deficit in the euro area and in the EU25 improved slightly in 2004 after having deteriorated for three consecutive years. But this was largely the result of progress in new Member States. The situation of public finances needs to be dealt with resolutely to prevent debt ratios from increasing, also in view of looming ageing prospects, and to better use public resources to foster a higher growth potential.

The main conclusions from the analysis presented in the 2005 Public Finances in EMU report are as follows:


  • In spite of a reduction in deficits in the EU area, debt is increasing and sustainability of public finances is not ensured in many countries. This calls for a renewed attention to the evolution of the debt, including to stock flow adjustments, and to the quality of fiscal consolidations.
  • There is an increasing discrepancy between Member States’ budgetary plans and the actual results, which is due mostly to expenditure slippages. The answer to this must be well-designed medium-term expenditure frameworks at national level to help achieve a better control over expenditure.
  • Structural reforms are key to increase growth potential, but may increase deficits in the short-term. However, this impact is in general quite small and depends on the type of reform. This evidence points in favour of considering structural reforms in the evaluation of budgetary policies but also of assessing them on a case-by-case basis when implementing the reformed Stability and Growth Pact.
  • As in many other Member States, there is scope in the recently acceded Member States to manage their public finances in such a way to combine growth and stability objectives via restructured expenditure programmes, improved tax administration and strengthened fiscal governance. 

    Individual chapters
    Part I: Current developments and prospects  pdf (848 kB) Choose translations of the previous link  (pdf file 250 kb)
    Part II: Evolving budgetary surveillance  pdf (713 kB) Choose translations of the previous link  (pdf file 500 kb)
    Part III: Structural reforms and budgetary objectives  pdf (713 kB) Choose translations of the previous link  (pdf file 280 kb)
    Part IV: Fiscal challenges during convergence in the recently acceded Member States  pdf (373 kB) Choose translations of the previous link  (pdf file 230 kb)
    Part V: Member States developments  pdf (457 kB) Choose translations of the previous link  (pdf file 210 kb)
    Part VI: Resources  pdf (581 kB) Choose translations of the previous link  (pdf file 100 kb)
    Statistical annex  pdf (203 kB) Choose translations of the previous link   (pdf file 1040 kb) 

    • (European Economy 03. January 2005. Luxembourg. 422pp. Tab. )

    KC-AR-05-003-EN-C (online)
    ISBN 92-894-8882-4 (online)
    ISSN 0379-0991 (online)

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