Brussels, 19/05/2004 (Agence Europe) - As anticipated, the European Commission decided on Tuesday to pursue proceedings to sort out the slippage in Dutch public deficit, which exceeded the reference value of 3% of GDP in 2003. The Commission also published a report on the budgetary situation in Greece, which is the first stage in the excessive deficit proceedings.
Netherlands: In line with article 104, paragraph 5 of the Treaty, the Commission recommends that the Ecofin Council note the existence of an excessive public deficit (3.2% in 2003, with risks subsisting for 2004, despite extra economy measures adopted by the government in April). The Council is also invited to send the Dutch authorities recommendations to put an end to the excessive deficit situation in 2005. Under article 3, paragraph 4, of the 1997 regulation on the implementation of the excessive deficit proceedings, the Netherlands have four months, once the Council adopts the recommendations, to adopt such measures. The Commission recommends that the Dutch authorities reduce the cyclically-adjusted deficit by at least half a percentage point of GDP a year. The Commission's proposals will be examined at the meeting of the Ecofin Council on 2 June.
Greece: Following Eurostat verification, the Commission adopted a report on Greece's budgetary situation, confirming that the Greek public deficit rose to 3.2% in 2003, and that it could also exceed the reference value in 2004. According to the Commission, these problems are not the result of exceptional circumstances outside the control of the Greek authorities, much less due to strong economic recession (economic growth in Greece averaged above 4% in the period 2000-2003), but is instead the consequence of a fall in revenue and an unforeseen increase in expenditure, notably in preparation for the Olympic Games in August. The Commission is also concerned at the high level of public debt. Gross public debt is set to fall very slightly in 2004 to 102.8% of GDP as against 103.0% in 2003, thus remaining greatly in excess of the reference value of 60% of GDP laid down in the Treaty. In a few weeks, the Commission will recommend that excessive deficit proceedings be undertaken against Greece. The recommendations of the Commission will be examined by the Ecofin Council of 5 July.