Brussels, 18/02/2003 (Agence Europe) - The Economy and Finance Ministers, who met on Tuesday in Brussels, adopted by qualified majority an opinion on the updated convergence programme of the United Kingdom in which they recommend that the British authorities should tend towards a budgetary position balanced in the medium term, in conformity with the requirements of the Stability and Growth Pact. The Ecofin Council also unanimously adopted opinions on the stability programmes of Spain, Belgium and Ireland and on Denmark's convergence programme, opinions that take up the broad lines of the remarks made by the Commission (see EUROPE of 31 January, p.7).
Belgium, Spain and Denmark, which defended strict reading of the provisions of the Stability Pact, voted against the Council's stance on the United Kingdom's convergence programme, opposing the abolition of a sentence (Ed.: as quoted below) suggested by the Economic and Finance Committee (ECF), whereby the nominal and structural deficits foreseen during the last years of the Stability Programme (2006, 2007 and 2008) amount to 1.5% of GDP "which is well above the position close to balance demanded by the Stability Pact". The Commission, which shared the same tough position as these three countries, finally agreed to do away with this wording in exchange for the adoption of a declaration affirming that the United Kingdom could allow itself a slight worsening of the deficit, on condition that the deficit does not exceed the reference value of 3% of GDP.
In its opinion, the Council supports the remarks made by the European Commission on the risk that the British public deficit could reach 3% of GDP in 2003-2004. The Council notes that the "relatively high" public debt foreseen for 2003-04, namely 2.2% of GDP, is based on forecast growth of 2.5% in 2003 and 3% in 2004, which today seems to be optimistic in light of the global uncertainty prevailing. Such budgetary projections could result in a deficit that would reach the reference value of 3% of GDP and, as a result, they may not be in line with the requirements of the Stability and Growth Pact, the Council says.