Brussels, 28/04/2009 (Agence Europe) - During Monday 4 May's presentation of the Commission new spring forecasts updating figures for growth and public finance for 2009-10 (EUROPE 9843), the Commissioner for economic and monetary affairs, Joaquin Almunia, is expected to clarify his plans for the next excessive debt procedures. Although member states public deficits are expected to get a little worse than those for the last tax year (EUROPE 9821), the Commission will not immediately begin new procedures. It is not expected to present reports on the existence of an excessive deficit (Article 3§104 of the treaty) for a few weeks (this phase precedes the formal activation of the procedure as included in Articles 5§104, 6 and 7). During this time, the Commission is expected to continue targeting action on countries where the deficit has already overshot the 3% GDP ceiling in 2008 and which is expected to remain above it in 2009, indeed in the years to come.
Although, as it announced in January (EUROPE 9843), the possibility of taking preventative action exists (against a country whose deficit is in danger of rising above the reference in Stability and Growth Pact at the end of this year), current trends in the economy should not be expected to lead to a change in its present approach. Despite the risk of slippage occurring in public funding for 2009, the countries that have kept their deficits to below 3% in 2008, are therefore expected to once again escape any triggering of the excessive debt procedure. On the basis of figures published by Eurostat last week (EUROPE 9887), several member states had deficits above or equal to 3% last year and might be affected by the first stage of the procedure. This will largely depend on the Commission's impending forecasts but countries like Poland and Romania appear to be edging close to the first stage. Warsaw ultimately chalked up a deficit of 3.9% in 2008 and was, according to the Commission's forecasts last January, in danger of hitting -3.6% in 2009. The Romanian deficit stood at 5.4% in 2008 and is expected to rise to -7.5% in 2009, according to January estimates. Although less pressing, there is also the same threat in other countries. Estonia gave notification of a 3% deficit in 2008 (according to Eurostat) and is expected to reach -3.2% in 2009 (according to January forecasts), while Lithuania's deficit was -3.2% in 2008 (according to Eurostat) but is expected to be brought down to -3% in 2009 (according to figures last January). Latvia, which has already been the subject of a report on the existence of excessive deficit (EUROPE 9843) has so far managed to escape any formal procedures, with the priority being macro-financial support being given to Riga under the “balance of payments” facility. The country might, however, soon be affected by the next step in the procedure.
As part of the excessive deficit procedure, Spain, France, Greece, Ireland and the United Kingdom have just been sent recommendations from the Council (EUROPE 9890) outlining differentiated adjustment trajectories for them in view of rectifying slippage observed at the end of March by the Commission (EUROPE 9868). The Commission is still due to endorse the stability and convergence programmes for five member states (Austria, Belgium, Slovakia, Slovenia and Romania) but no date for examination by the College of Commissioners has so far been set out. (A.B./trans/rh)