Brussels, 18/02/2009 (Agence Europe) - In addition to the programmes of six countries also concerned by an analysis of their budgetary situation with regard to the Stability and Growth Pact, 11 other stability and convergence programmes were examined by the Commission on Wednesday 18 February. Another series of programmes will be put to the College of Commissioners on 25 February.
Germany. After a public deficit in balance in 2007 and 2008, the German government is predicting a deficit of 3% of GDP in 2009, i.e. the limit value fixed in the Stability and Growth Pact, then of 4% in 2010. Budgetary consolidation will resume after 2010, according to the updated stability programme, which aims at a 3% GDP deficit in 2011 and 2.5% in 2012. Germany's public debt should gradually increase and, after 65.1 and 65.5% in 2007 and 2008, it is predicted to gradually reach 72.5% in 2012. Germany is above all invited by the Commission to implement measures announced in line with the recovery plan and to support budgetary consolidation as soon as the economy starts to recover. Berlin should also strengthen the institutional budgetary framework to implement new budgetary rules aimed at limiting structural deficit of the federal government to 0.35% of GDP.
Bulgaria. According to the Bulgarian convergence programme, budgetary surpluses are expected between 2007 and 2011 (+3% from 2008 to 2011). Growth in this country is doing well (6.2% in 2007, 6.5% in 2008 and 4.7% in 2009 according to government figures).
Denmark. According to the Danish convergence programme, public debt should remain at zero in 2009, after large surpluses in 2007 (4.4%) and 2008 (3%). A 1.2% deficit is nonetheless expected in 2010, before returning to balance in 2011. The Danish public debt grew from 26.3% in 2007 to 30.3% in 2008 but should be gradually reduced thereafter (24.6% in 2012).
Estonia. After many years of growth, Estonia is currently suffering a severe recession. After growth of 6.3% in 2007, the GDP is expected to contract by 2.2% in 2008 and 3.5% in 2009, before rising again in 2010 (with +2.6% according to Estonian figures). The public deficit will remain below 3% between 2008 and 2012 (1.9% in 2008 and 1.7% in 2009) after a surplus of +2.7% in 2007.
Finland. The Finnish economy rapidly lost speed in 2008 (after 4.9% growth in 2006 and 4.2% in 2007). The fundamentals of the country's economy remain sound, however, and Finland should be able to count on budgetary surpluses: +2.1% in 2009, +1.1% in 2010, +1% in 2011 and +0.9% in 2012.
Hungary. The country has managed to greatly reduce its deficit (from 9.3% in 2006 to 3.4% in 2008) but has been particularly exposed to the financial crisis. Budapest, which has enjoyed support for the balance of payments, should be content with the terms and conditions set at the time when international financial assistance is granted. The convergence programme thus provides for budgetary consolidation strategy to be continued with a fall in public deficit in 2009 (to 2.6%), then to -2.5% in 2010 and -2.2% in 2011. The government, however, adopted an additional corrective package on 15 February of 0.7% of GDP and has reviewed the rise in forecast deficit. Hungary is therefore particularly advised to take the measures necessary to keep its public debt under the 3% this year and to turn around the upward trend in public debt to gradually come closer to the limit value of 60%.
The Netherlands. The updated stability programme provides for stable budgetary surplus between 2008 and 2011 but the Commission considers that this scenario is subject to risks linked to developments in economic growth and the price of gas. Sizeable guarantees must also be taken into account, granted to the financial sector, the Commission says, noting that the main challenges to be raised by the government consist of restoring confidence in the financial sector and supporting investment.
Poland. The strong economic growth in Poland is expected to slow down in 2009 (+3.7% compared to +5.1% in 2008 and +6.7% in 2007). The updated convergence programme provides for public deficit of 2.5% of GDP in 2009 and a fall in the following years (deficit of 2.3 in 2010 and 1.9 in 2011). Warsaw, however, foresees additional budgetary measures, some of which are not temporary and should therefore ensure that its deficit remains below the 3% GDP mark, the Commission recommends.
Czech Republic. The programme provides for a 1.6% GDP deficit in 2009 and 1.5% GDP in 2010. The Commission advises the government to continue reform in pensions and the health system.
United Kingdom. The British convergence programme confirms the rapid deterioration of the country's budgetary situation (a new recommendation under excessive deficit procedure will be addressed to it end March). The government debt is estimated at 5.5% of GDP in 2008/2009 and at 8.2% in 2009/2010. The country is invited by the Commission to avoid all further worsening in the financial situation and to strengthen the pace of budgetary consolidation from 2010/2011 onwards.
Sweden. The country's budgetary position remains sound with comfortable budgetary surpluses (+2.8% in 2008, +1.1% in 2009, +1.6% in 2010 and +2.5% in 2011). The public debt is falling constantly and the Swedish convergence programme is based on a 35.5% of GDP ratio in 2008 and even 23.8% in 2011. (A.B./L.C./transl.jl)