Brussels, 15/06/2010 (Agence Europe) - On Tuesday 15 June, the European Commission concluded that measures taken by 12 member states were sufficient to correct their excessive deficit within the set timeframe. Belgium, the Czech Republic, Germany, Ireland, Spain, France, Italy, the Netherlands, Austria, Portugal, Slovenia and Slovakia took measures in response to the Council recommendations (see EUROPE 10032) and so are appropriate to achieve objectives for 2010. In most cases, however, things will have to be tweaked a little if targets are to be reached for the following years, Economic and Monetary Affairs Commissioner Olli Rehn told press as he presented the outcome of the college meeting. “The current budgetary targets appear to ensure an appropriate overall fiscal stance for the EU,” he said. For Spain and Portugal, beyond the assessment of effective action, the adequacy of the new announced targets and measures was also assessed. The new objectives were appropriate, the Commission said. Spain and Portugal are expected to specify measures in their 2011 budgets amounting to 1¾% and 1½% of GDP respectively in order to attain these new targets. On 13 July, the Ecofin Council will decide on all 12 cases and on the Commission recommendations that new procedures be opened against Cyprus, Denmark and Finland.
The Commission has concluded that there are excessive deficits in these three countries (recommendations under Article 126(5-7) of the Treaty on the Functioning of the EU). The case of Bulgaria will be examined once clarification has been brought on certain statistical data (see EUROPE 10156). Bulgaria will also be involved in an excessive deficit procedure, so that only three member states - Estonia, Luxembourg and Sweden - will not be subject to such a procedure.
On the opening of the three new procedures, Rehn said that “the need for fiscal consolidation varies per country, however, and the deadlines and fiscal efforts we recommend today reflect these differences”. According to the Commission, Cyprus will bring its deficit back below 3% of GDP by the end of 2012, Denmark by the end of 2013 and Finland by the end of 2011. In Cyprus, the deficit reached 6.1% of GDP in 2009, while the government debt is expected to reach 62% of GDP in 2010. Cyprus should reduce the 2010 deficit to below 6.0% of GDP and ensure an annual structural adjustment of 1¾% of GDP over the period 2010-2012. In Denmark, the deficit is forecast to reach 5.4% of GDP in 2010 and the Commission recommends budgetary consolidation should begin in 2011. Denmark should implement the budgetary measures in 2010 as planned and ensure an annual structural adjustment of ½% of GDP over the period 2011-2013. Finally, in Finland, the deficit is likely to rise to 4.1% of GDP in 2010. Thus, Finland should implement the budgetary measures in 2010 as planned and ensure a structural adjustment of at least ½% of GDP in 2011. (A.B./transl.rt)