Brussels, 07/10/2009 (Agence Europe) - On Wednesday 7 October, the European Commission examined the situation of public finances in nine member states where deficits are projected to exceed the 3% threshold set in the Stability and Growth Pact (SGP). With the adoption, as announced (see EUROPE 9990), of reports on Austria, Belgium, the Czech Republic, Germany, Italy, Slovakia, Slovenia, the Netherlands and Portugal, the Commission is preparing for excessive deficit procedures to be brought very shortly. According to its assessment, these countries have deficits which, while exceptional in nature (as a result of the serious economic downturn), are neither close to the reference value nor temporary.
The following is a summary of the updated situation in each of the countries. For Germany, the Commission's spring forecast indicates a deficit of 3.9% of GDP in 2009, and 5.9% in 2010. For Austria, forecasts are for -4.2% and -5.3%. According to the updated stability programme it submitted in September, Belgium is expected to experience a deficit higher than that given in the Commission's April forecast, with 5.9% in 2009 and 6% in 2010. Compared with Commission figures, Italy has revised its deficit upwards to 5.3% in 2009 and 5% in 2010. In the Netherlands, the government now expects a 4.8% deficit in 2009 and 6.3% in 2010, while in Portugal, the authorities are now forecasting a 5.9% deficit in 2009 (the Commission forecasts -6.7% in 2010). After revising its budget for the current year, Slovakia is looking at a 6.3% deficit in 2009 and 5.5% in 2010. Based on the Commission's April forecast, Slovenia will record a deficit of 5.5% this year and 6.5% next. In the Czech Republic, the deficits forecast are 4.3% (perhaps even 5.5% according to the latest government figures) and 4.9% in 2009 and 2010 respectively.
In November, the Commission is expected to formally acknowledge that there is excessive deficit (Article 104§5 and 6) and prescribe an adjustment path (Article 104§7) for these countries, which will mean they join those for which excessive deficit procedures have already begun (France, Greece, Hungary, Ireland, Latvia, Lithuania, Malta, Poland, Romania, Spain and the United Kingdom). For the moment seven countries, on the basis of their notifications and the Commission's spring forecast, are not involved in deficit procedures: these are Bulgaria, Cyprus, Denmark, Estonia, Finland, Luxembourg and Sweden. “We will see what we say after the autumn economic forecast”, which will be published on 3 November, the spokeswoman for Joaquín Almunia said, not fully ruling out further cases. (A.B./transl.rt)