Brussels, 11/07/2006 (Agence Europe) - With the decision to conclude the excessive debt procedure against Cyprus and take note of the adequate progress made by Portugal in correcting its public finances within the given deadlines, the Ecofin Council on Tuesday followed the recommendations of the European Commission (EUROPE 9216). The Council observed a “positive development” in Cyprus, which registered a deficit of 2.4% in 2005. At the end of the meeting, Finnish finance minister Eero Heinäluoma declared that the Council had therefore decided that it “is not necessary to go further” at this stage with Portugal.
According to the conclusions of the Council, Portugal has taken appropriate measures to correct its public debt but without having to resort to exceptional measures, in compliance with recommendations made in September 2005 and adopted on the basis of Article 104§7. These measures, the Council indicated, are sufficient and should allow for adequate progress to be made in 2006 if they are fully implemented. The return to a deficit of below 3% by 2008 still remains uncertain, ministers underline, and note that additional measures may prove necessary, particularly if measures of spending control turn out to be ineffective.
Addressing the press, Joaquin Almunia welcomed efforts made by Cyprus, the first of the new Member States from the last enlargement to be released from the excessive debt procedure they had been subject to since their accession in 2004. The Commissioner also welcomed the declarations from the Cypriot minister of finance, Michalis Sarris, who assured his counterparts that his country would continue its efforts to fulfil all the criteria for joining the Euro. Ministers therefore adopted a decision cancelling, under Article 104§12 of the treaty, the decision of July 2004, which illustrated that an excessive debt situation existed in Cyprus. Cyprus's excessive debt rose to 2.4% of GDP in 2005, as opposed to 4.1% in 2004 and 6.25% in 2003. Public debt fell to 70.25 of GDP in 2005 as opposed to 72.25% in 2003.