Brussels, 12/02/2008 (Agence Europe) - The ECOFIN Council has adopted opinions on the Stability or Convergence Programmes of a first series of member states for which the European Commission unveiled its recommendations in January (see EUROPE 9586 and 9591).
Of the eleven countries assessed, five have achieved their Medium Term Objectives (MTOs), namely Germany, Finland, Luxembourg, the Netherlands and Sweden. The five are called upon to maintain their healthy budget position and avoid pro-cyclical economic policies. Germany is urged to continue with the good results achieved in 2007 by ensuring control over expenditure and using any extra income to reduce its debt. The six countries which have not yet reached their MTO are expected to implement a 'tight budget policy,' explained Slovenia's Finance Minister Andrej Bajuk after the meeting he had been chairing. Three are very far from their MTO (France, Italy and Hungary), with slow adjustment and risk-ridden forecasts, explained EU Economic and Monetary Affairs Commissioner Joaquin Almunia. For France, the ministers confirmed the wording chosen the day before by Eurogroup (see related article) urging the country to reach its MTO by 2010 if the cyclical conditions allow. France is therefore being asked to rigorously apply its budget in 2008, reducing the proportion of spending to GDP, and continuing to speed up its structural reforms to increase growth potential. With excess budget deficit proceedings launched against them, Italy and Slovakia will probably have the proceedings dropped in May 2008 when the final figures for 2007 are confirmed. Rome is being urged to take advantage of the good results in 2007 to reinforce budget adjustment in 2008 in order to reach its MTO on time. Romania and the United Kingdom should pursue their efforts to avoid overshooting the 3% GDP reference value and therefore avoid the launch of excess budget deficit proceedings. Hungary must correct its excess budget deficit by the end of 2009, which will require rigorous implementation of the budget for 2008 and possibly further measures besides. On Wednesday 13 February, the European Commission will examine the programmes of nine other member states, namely Austria, Bulgaria, Cyprus, Estonia, Latvia, Malta, the Czech Republic, Slovenia and Portugal. (A.B.)