eunbil · GT0N1428 · 2006-07-07 00:00:00 — IP/06/813 Commission recommends abrogation of excessive deficit procedure against Commission today has decided to recommend that the Council abrogates the excessive deficit procedure (EDP) against after the deficit fell to of GDP in 2005 and is projected to decrease further in 2006 and 2007. debt to GDP ratio also dropped to 70¼%, in 2005 and is seen at in 2007. would be the first of the six new Member States that were put into the EDP upon European Union membership, to see the procedure abrogated. It would also be the first procedure to be closed since the , in 2005. In total, there remain 11 countries in excessive deficit procedure, five of which are in the euro area. "The Cypriot case shows that budgetary consolidation undertaken with resolve can achieve sustainable results. I encourage to pursue this route and achieve its objective of having finances close to balance by the end of the decade given the high risk arising from the costs of an ageing population", said , European Commissioner for Economic and Monetary Affairs. The Commission today has recommended to the to close the excessive deficit procedure against in view of the sustainable correction of the deficit and of the downward path assumed by the debt. The deficit of fell to of GDP in 2005 and the government debt-to-GDP ratio also decreased to 70¼% last year. According to the Commissions spring forecasts, the deficit and the debt are expected to fall further in 2006 and 2007, thus staying well below the reference value and allowing the debt ratio to diminish sufficiently towards the of GDP reference value. That points to a durable correction of the excessive deficit, thanks to the substantial and largely structural measures taken by the Cypriot authorities. The underlying budgetary position (as measured by the deficit corrected for cyclical effects) also improved markedly in 2005 and is expected to develop favourably also in 2006. According to the Council Opinion of 14 2006 on the updated convergence programme of for 2005-2009, the measures planned by the Cypriot authorities over the programme period should be sufficient to bring the structural deficit to about ½% of GDP by 2009, which is the medium-term objective chosen by the Cypriot authorities. Therefore, the Council is invited to conclude on 11 that no longer has an excessive deficit. First new out of EDP This would be the first time the excessive deficit procedure would be closed for one of the six new Member States that were put in the procedure by Council decisions of 5 2004, upon EU accession on account of running deficits higher than . had a deficit of 6¼% in 2003. recommended a correction below by 2005 in a credible and sustainable while ensuring that the rise in the debt ratio was brought to a halt in 2004 and reversed thereafter. This has been achieved. With the abrogation of the procedure on , there would be 11 Member States in EDP: , , , , , , , , , , and . , and the were the last ones to be included in the procedure in 2005. Their deadline for correcting the deficit ranges between 2005 and 2008. The text of the Commissions assessment of can be found at The following table compares budgetary targets contained in the and Convergence Programmes as well as the Commissions services spring economic forecasts of 8 this year.