Brussels, 08/10/2007 (Agence Europe) - In conclusions on the effectiveness of the preventative arm of the Stability and Growth Pact (SGP) adopted on Monday 2 October, the ECOFIN Council states that it is of the highest importance to move towards viable budget positions. The draft text will be submitted to ministers for approval. It follows up on the report on 2007 public finances adopted by the European Commission in June (see EUROPE 9445). The Commission noted a sharp improvement in member states' budget situation but regretted the lack of political will among an increasing number of countries to take advantage of the economic boom in order to improve their budgets (see EUROPE 9445).
The draft conclusions document notes that it must be ensured that the positive budget adjustment dynamic must continue, adding that all countries which have not yet met their medium-term targets (MTT) should speed up their budget and debt reduction work and devote greater resources than initially planned to this purpose. A minimum adjustment of 0.5% of GDP, on top of one-off and temporary measures, is also called for. The ministers repeat the importance of the MTTs being taken on board in the member states, including through the involvement of national parliaments where appropriate (one of the measures suggested by the Commission in its report to boost the preventative arm of the SGP). The conclusions document confirms the need to take long-term budget viability into account in the MTT, particularly the future impact of the aging population. In order to improve budget surveillance, the Commission is asked to extend its regular assessment of national budget policies by making a deeper analysis of the overall macro-economic situation and the formation of macroeconomic imbalances. The document explains that stability and convergence programmes should specify in more detail exactly how the MTT are to be achieved and whether additional measures will be required. (ab)