# Regulation (EU) No 473/2013 of the European Parliament and of the CouncilShow full title

Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring            and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area         

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# Regulation (EU) No 473/2013 of the European Parliament and of the Council

# of 21 May 2013

# on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of                        the Member States in the euro area                     

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 136 in combination with Article                           121(6) thereof,                        

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank(1),                        

Acting in accordance with the ordinary legislative procedure(2),                        

Whereas:

(1)The Treaty on the Functioning of the European Union (TFEU) requires that Member States regard their economic policies as a                              matter of common concern, that their budgetary policies are guided by the need for sound public finances and that their economic                              policies do not risk jeopardising the proper functioning of economic and monetary union.

(2)The Stability and Growth Pact (SGP) aims to secure budgetary discipline across the Union and sets out the framework for preventing                              and correcting excessive government deficits. It is based on the objective of sound government finances as a means of strengthening                              the conditions for price stability and for strong sustainable growth underpinned by financial stability, thereby supporting                              the achievement of the Union's objectives for sustainable growth and jobs. The SGP includes the multilateral surveillance                              system laid down in Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary                              positions and the surveillance and coordination of economic policies(3) and the procedure for the avoidance of excessive government deficit laid down in Article 126 TFEU and further specified in                              Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit                              procedure(4). The SGP has been further strengthened by Regulation (EU) No 1175/2011 of the European Parliament and of the Council(5) and Council Regulation (EU) No 1177/2011(6). Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011 on the effective enforcement                              of budgetary surveillance in the euro area(7) added a system of effective, preventive and gradual enforcement mechanisms in the form of the imposition of sanctions on                              Member States whose currency is the euro.

(3)The strengthening of the SGP has enhanced the guidance provided to Member States concerning prudent fiscal policy-making,                              and, for the Member States whose currency is the euro, has reinforced and made more automatic the imposition of sanctions                              for non-compliance with prudent fiscal policy-making, in order to avoid excessive government deficits. Those provisions have                              created a more comprehensive framework.

(4)In order to ensure closer coordination of economic policies and sustained convergence of the economic performance of Member                              States, the European Semester, as established in Article 2-a of Regulation (EC) No 1466/97, provides a framework for economic                              policy coordination. The European Semester includes the formulation, and the surveillance of the implementation, of the broad                              guidelines of the economic policies of the Member States and of the Union (broad economic policy guidelines) in accordance                              with Article 121(2) TFEU; the formulation, and the examination of the implementation, of the employment guidelines that must                              be taken into account by Member States in accordance with Article 148(2) TFEU (employment guidelines); the submission and                              assessment of Member States' stability or convergence programmes under that Regulation; the submission and assessment of Member                              States' national reform programmes supporting the Union’s strategy for growth and jobs and established in line with the broad                              economic guidelines, with the employment guidelines and with the general guidance to Member States issued by the Commission                              (the annual growth survey) and the European Council at the beginning of the annual cycle of surveillance; and surveillance                              to prevent and correct macroeconomic imbalances under Regulation (EU) No 1176/2011 of the European Parliament and of the Council                              of 16 November 2011 on the prevention and correction of macroeconomic imbalances(8). Where appropriate, opinions issued in the context of an economic partnership programme, as established by this Regulation,                              should also been taken into account.

(5)To enable the Union to emerge stronger from the crisis, both internally and at an international level, by boosting competitiveness,                              productivity, growth potential, social cohesion and economic convergence, the European Council, in its conclusions of 17 June                              2010, adopted a new Union’s strategy for growth and jobs which also contains objectives in the fields of poverty, education,                              innovation and the environment.

(6)In order to ensure the proper functioning of the economic and monetary union, the TFEU allows the adoption of specific measures                              in the euro area which go beyond the provisions applicable to all Member States to strengthen the coordination and surveillance                              of their budgetary discipline. Such reinforced coordination and surveillance should be accompanied by commensurate involvement                              of the European Parliament and of national parliaments as appropriate. Active use, where appropriate and necessary, should                              be made of specific measures provided for in Article 136 TFEU.

(7)The application of this Regulation should be in full compliance with Article 152 TFEU and the recommendations issued under                              this Regulation should respect national practice and institutions for wage formation. This Regulation takes into account Article                              28 of the Charter of Fundamental Rights of the European Union, and, accordingly, does not affect the right to negotiate, conclude                              or enforce collective agreements or to take collective action in accordance with national law and practice.

(8)Article 9 TFEU provides that, in defining and implementing its policies and activities, the Union is to take into account                              requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight                              against social exclusion, and a high level of education, training and protection of human health.

(9)Gradually strengthened surveillance and coordination, as set out in this Regulation, will further complete the European Semester                              for economic policy coordination, will complement the existing provisions of the SGP and strengthen the surveillance of budgetary                              and economic policies in Member States whose currency is the euro. A gradually enhanced monitoring procedure should contribute                              to better budgetary and economic outcomes, macro-financial soundness and economic convergence, to the benefit of all Member                              States whose currency is the euro. As part of a gradually strengthened process, closer monitoring is particularly valuable                              to Member States that are subject to an excessive deficit procedure.

(10)Biased and unrealistic macroeconomic and budgetary forecasts can considerably hamper the effectiveness of budgetary planning                              and, consequently, impair commitment to budgetary discipline. Unbiased and realistic macroeconomic forecasts can be provided                              by independent bodies or bodies endowed with functional autonomy *vis-à-vis* the budgetary authorities of a Member State and which are underpinned by national legal provisions ensuring a high degree                              of functional autonomy and accountability. Such forecasts should be used throughout the budgetary procedure.

(11)Strong public finances are best ensured at the planning stage and gross errors should be identified as early as possible.                              Member States should benefit not just from the setting of guiding principles and budgetary targets but also from a synchronised                              monitoring of their budgetary policies.

(12)Setting up a common budgetary timeline for Member States whose currency is the euro should better synchronise the key steps                              in the preparation of national budgets, thus contributing to the effectiveness of the SGP and of the European Semester for                              economic policy coordination. This should lead to stronger synergies by facilitating policy coordination among Member States                              whose currency is the euro and by ensuring that Council and Commission recommendations are appropriately integrated in the                              budgetary procedure of the Member States. That procedure should be consistent with the framework for economic policy coordination                              in the context of the annual cycle of surveillance which includes, in particular, the general guidance to Member States issued                              by the Commission and the European Council at the beginning of the cycle. Member States' budgetary polices should be consistent                              with the recommendations issued in the context of the SGP and, where appropriate, with recommendations issued in the context                              of the annual cycle of surveillance, including the macroeconomic imbalances procedure as established by Regulation (EU) No 1176/2011,                              and with opinions on economic partnership programmes, as established by this Regulation.

(13)As a first step of that common budgetary timeline, Member States should make public their national medium-term fiscal plan                              at the same time as their stability programmes preferably by 15 April and no later than by 30 April. Those fiscal plans should                              include indications on how the reforms and measures set out are expected to contribute to the achievement of the targets and                              national commitments established within the framework of the Union's strategy for growth and jobs. The national medium-term                              fiscal plan and the stability programme can be the same document.

(14)One important milestone of that common budgetary timeline should be the publication of the draft central government budget                              by 15 October. Since compliance with the rules of the SGP is to be ensured at the level of the general government and achievement                              of the budgetary objectives requires consistent budgeting across all subsectors of the general government, the publication                              of the draft central government budget should be accompanied by the publication of the main parameters of the draft budgets                              of all the other subsectors of the general government. Such parameters should include, in particular, the projected budgetary                              outcomes of the other subsectors, the main assumptions underlying those projections and the reasons for expected changes with                              respect to the stability programme assumptions.

(15)The common budgetary timeline also provides for the budget to be adopted or fixed upon annually by 31 December together with                              the updated main budgetary parameters for the other subsectors of the general government. Where, for objective reasons beyond                              the control of the government, the budget is not adopted by 31 December, reversionary budget procedures should be put in place                              to ensure that the government remains able to discharge its essential duties. Such arrangements could include the implementation                              of the government's draft budget, of the preceding year's approved budget, or of specific parliament-approved measures.

(16)With a view to better coordinating the planning of their national debt issuance, the Member States should report *ex ante* on their public debt issuance plans to the Eurogroup and to the Commission.

(17)Compliance with effective rules-based fiscal frameworks can be important in supporting sound and sustainable fiscal policies.                              Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States(9) established that monitoring of compliance with country-specific numerical fiscal rules should be supported at national level                              by independent bodies or bodies endowed with functional autonomy. It is important to note that given the diversity of possible                              and existing arrangements, while not the preferred option, it should be possible for more than one independent body to be                              in charge of monitoring compliance with those rules as long as there is a clear allocation of responsibility and as long as                              there is no overlap of competency over specific aspects of the monitoring. Excessive institutional fragmentation of monitoring                              tasks should be avoided. In order for monitoring bodies to fulfil their mandate effectively, national legal provisions ensuring                              a high degree of functional autonomy and accountability should underpin such bodies. The design of those monitoring bodies                              should take into account the existing institutional setting and the administrative structure of the Member State concerned.                              In particular, it should be possible to endow a suitable entity of an existing institution with functional autonomy provided                              that such an entity is designated to carry out specific monitoring tasks, has a distinct statutory regime and complies with                              the other principles referred to in this recital.

(18)This Regulation does not impose on Member States additional requirements or obligations with regard to country-specific numerical                              fiscal rules. Strong country-specific numerical fiscal rules consistent with the budgetary objectives at the level of the                              Union and monitored by independent bodies are a cornerstone of the strengthened budgetary surveillance framework of the Union.                              The rules with which those bodies should comply, and their specific tasks, are set out in this Regulation.

(19)Member States whose currency is the euro are particularly subject to spill-over effects from each other's budgetary policies.                              Member States whose currency is the euro should consult the Commission and each other before adopting any major fiscal policy                              reform plans with potential spill-over effects, so as to allow an assessment of the possible impact for the euro area as a                              whole. They should also consider their budgetary plans to be of common concern and submit them to the Commission for monitoring                              purposes in advance of their becoming binding. The Commission, in cooperation with the Member States, should propose guidelines                              in the form of a harmonised framework for the specification of the content of draft budgetary plans.

(20)In the exceptional cases where, after consulting the Member State concerned, the Commission identifies in the draft budgetary                              plan particularly serious non-compliance with the budgetary policy obligations laid down in the SGP, the Commission, in its                              opinion on the draft budgetary plan, should request a revised draft budgetary plan, in accordance with this Regulation. This                              will be the case, in particular, where the implementation of the draft budgetary plan would put at risk the financial stability                              of the Member State concerned or risk jeopardising the proper functioning of the economic and monetary union, or where the                              implementation of the draft budgetary plan would entail an obvious significant violation of the recommendations adopted by                              the Council under the SGP.

(21)The Commission's opinion on the draft budgetary plan should be adopted as soon as possible and in any event by the end of                              November, taking into account, to the extent possible, the specific national fiscal schedule and parliamentary procedures,                              in order to ensure that Union's policy guidance in the budgetary area can be appropriately integrated in the national budgetary                              preparations. In particular, the opinion should include an assessment of whether the budgetary plans appropriately address                              the recommendations issued in the context of the European Semester in the budgetary area. At the request of the parliament                              of the Member State concerned or of the European Parliament, the Commission should be prepared to present its opinion to the                              parliament making the request, after it has been made public. Member States are invited to take into account, in the process                              of adopting their budget law, the Commission opinion on their draft budgetary plan.

(22)The extent to which that opinion has been taken into account in a Member State's budget law should be part of the assessment,                              if and when the conditions are met, leading to a decision on the existence of an excessive deficit in the Member State concerned.                              In such a case, no follow-up to the early guidance from the Commission should be considered as an aggravating factor.

(23)Also, based on an overall assessment of the draft budgetary plans by the Commission, the Eurogroup should discuss the budgetary                              situation and prospects for the euro area as a whole.

(24)Member States whose currency is the euro and which are subject to an excessive deficit procedure should be monitored more                              closely, in order to secure a full, sustainable and timely correction of the excessive deficit. Closer monitoring by means                              of additional reporting requirements should ensure prevention and early correction of any deviations from the Council recommendations                              to correct the excessive deficit. Such monitoring should complement the provisions set out in Regulation (EC) No 1467/97.                              Those additional reporting requirements should be proportionate to the stage of the procedure to which the Member State is                              subject, under Article 126 TFEU. As a first step, the Member State concerned should carry out a comprehensive assessment of                              in-year budgetary execution for the general government and its subsectors, taking into account in particular financial risks                              associated to contingent liabilities with potentially large impacts on public budgets.

(25)Additional reporting requirements for Member States whose currency is the euro and which are subject to an excessive deficit                              procedure should enable a better exchange of information between the Member States concerned and the Commission, and, as a                              consequence, the identification of risks in the compliance of a Member State with the deadline which has been set by the Council                              to correct its excessive deficit. In the event of such risks being identified, the Commission should issue a recommendation                              to the Member State concerned setting out appropriate measures to be taken within a given timeframe. Upon request, the Commission                              should present its recommendation to the parliament of the Member State concerned. Compliance with the recommendation should                              lead to a prompt correction of any developments putting at risk the correction of the excessive deficit within the established                              deadline.

(26)Assessment of compliance with the Commission recommendation should be part of the continuous assessment made by the Commission                              of effective action to correct an excessive deficit. When deciding whether effective action to correct the excessive deficit                              has been taken, the Council should also base its decision on whether or not the Member State complied with the Commission                              recommendation, while giving due consideration to Article 3(5) and Article 5(2) of Regulation (EC) No 1467/97.

(27)Indeed, Regulation (EC) No 1467/97, which sets out in detail the excessive deficit procedure based on Article 126 TFEU, embeds                              elements of flexibility which allow unexpected adverse economic events to be taken into account. Article 3(5) and Article                              5(2) of that Regulation provide that if effective action has been taken in compliance with, respectively, a recommendation                              under Article 126(7) TFEU or a decision to give notice under Article 126(9) TFEU, and unexpected adverse economic events with                              major unfavourable consequences for government finances occur after the adoption of that recommendation or decision to give                              notice, the Council may decide, on a recommendation from the Commission, to adopt a revised recommendation under Article 126(7)                              TFEU or a revised decision to give notice under Article 126(9) TFEU. The revised recommendation or revised decision to give                              notice, taking into account the relevant factors referred to in Article 2(3) of Regulation (EC) No 1467/97 may, in particular,                              extend the deadline for the correction of the excessive deficit by one year as a rule.The Council should assess the existence of unexpected adverse economic events with major unfavourable consequences for government                              finances against the economic forecasts in its initial recommendation or decision to give notice. In the case of a severe                              economic downturn in the euro area or in the Union as a whole, the Council may also decide, on a recommendation from the Commission,                              to adopt a revised recommendation under Article 126(7) TFEU or a revised decision to give notice under Article 126(9) TFEU,                              provided that that does not endanger fiscal sustainability in the medium term. In addition, Article 2(1a) of Regulation (EC)                              No 1467/97 provides that, in implementing the debt ratio adjustment benchmark, account shall be taken of the influence of                              the cycle on the pace of debt reduction. Thus, a Member State would not be considered as having breached the debt criterion                              laid down in Article 126(2)(b) TFEU if that is only because of negative cyclical conditions.

(28)Also, since budgetary measures might be insufficient to ensure a lasting correction of the excessive deficit, Member States                              whose currency is the euro and are subject to an excessive deficit procedure should present an economic partnership programme                              detailing the policy measures and structural reforms needed to ensure an effective and lasting correction of the excessive                              deficit, building on the latest update of their national reform programme and their stability programme.

(29)Furthermore, strengthening economic governance has involved a closer dialogue with the European Parliament. While recognising                              that the counterparts of the European Parliament in the framework of the dialogue are the relevant institutions of the Union                              and their representatives, the competent committee of the European Parliament may offer an opportunity to participate in an                              exchange of views to a Member State which is the subject of a Commission recommendation or of a Council opinion in accordance                              with this Regulation. The Member State's participation in such an exchange of views is voluntary.

(30)In order to specify the extent of the reporting obligations for Member States subject to an excessive deficit procedure, the                              power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the content and                              scope of such reporting. It is of particular importance that the Commission carry out appropriate consultations during its                              preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a                              simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(31)The power to adopt opinions on economic partnership programmes, as established by this Regulation should be conferred on the                              Council. Those opinions are complementary to the excessive deficit procedure laid down under Article 126 TFEU in accordance                              with which the Council is to decide on the existence of an excessive deficit and on the measures required to put an end to                              it.

(32)Recalling the importance of sound public finances, structural reform and targeted investment for sustainable growth, the Member                              States' Heads of State or Government signed a Compact for Growth and Jobs on 29 June 2012, demonstrating their determination                              to stimulate job-creating growth in parallel to their commitment to sound public finances. The Compact includes, in particular,                              measures to boost the financing of the economy. EUR 120 000 million (equivalent to around 1 % of the Union's Gross National                              Income) are being mobilised for fast-acting growth measures. As recommended in the annual growth survey in 2012 and 2013,                              the Member States should strive to maintain an adequate pace of fiscal consolidation while preserving investment aiming to                              achieve the Europe 2020 goals for growth and jobs.

(33)The Commission is monitoring the impact of tight budget constraints on growth enhancing public expenditure and on public investment.                              The Union's fiscal framework offers scope to balance the acknowledgement of productive public investment needs with fiscal                              discipline objectives: while fully respecting the SGP, the possibilities offered by the Union's existing fiscal framework                              to balance productive public investment needs with fiscal discipline objectives can be exploited in the preventive arm of                              the SGP. The Commission has announced its intention to report on the scope for possible action within the boundaries of the                              existing Union fiscal framework.

(34)The European Parliament's resolution of 20 November 2012 with recommendations to the Commission on the report of the Presidents                              of the European Council, the European Commission, the European Central Bank and the Eurogroup ‘Towards a Genuine Economic                              and Monetary Union’ and the Commission's Communication of 28 November 2012 entitled ‘A blueprint for a deep and genuine EMU’                              outline, respectively, the views of the European Parliament and of the Commission on the steps needed to achieve a deeper                              and better integrated economic and monetary union. Following the report ‘Towards a Genuine Economic and Monetary Union’, the                              European Council, in its conclusions in December 2012, set out its views on a number of issues with a view to the further                              strengthening of EMU,

HAVE ADOPTED THIS REGULATION:

## CHAPTER IU.K.**GENERAL PROVISIONS**

### Article 1U.K.Subject matter and scope

1.This Regulation sets out provisions for enhanced monitoring of budgetary policies in the euro area and for ensuring that national                        budgets are consistent with the economic policy guidance issued in the context of the SGP and the European Semester for economic                        policy coordination, by:                  

(a)complementing the European Semester, as established in Article 2-a of Regulation (EC) No 1466/97, with a common budgetary                        timeline;                  

(b)complementing the procedure for the prevention and correction of excessive macroeconomic imbalances, as established by Regulation                        (EU) No 1176/2011;                  

(c)complementing the multilateral surveillance system of budgetary policies, as established by Regulation (EC) No 1466/97, with                        additional monitoring requirements in order to ensure that Union policy recommendations in the budgetary area are appropriately                        integrated in the national budgetary preparations;                  

(d)complementing the procedure for correcting a Member State's excessive deficit, as established by Article 126 TFEU and by Regulation                        (EC) No 1467/97, with closer monitoring of the budgetary policies of Member States subject to an excessive deficit procedure                        in order to secure a timely and lasting correction of an excessive deficit;                  

(e)guaranteeing the consistency between budgetary policies and measures and reforms taken in the context of the procedure for                        prevention and correction of excessive macroeconomic imbalances as established by Regulation (EU) No 1176/2011 and, where                        appropriate, in the context of an economic partnership programme as referred to in Article 9.                  

2.The application of this Regulation shall be in full compliance with Article 152 TFEU and the recommendations issued under                        this Regulation shall respect national practice and institutions for wage formation. In accordance with Article 28 of the                        Charter of Fundamental Rights of the European Union, this Regulation shall not affect the right to negotiate, conclude or                        enforce collective agreements or to take collective action in accordance with national law and practice.                  

3.This Regulation shall apply to Member States whose currency is the euro.                  

### Article 2U.K.Definitions

1.For the purposes of this Regulation, the following definitions shall apply:                  

(a)‘independent bodies’ means bodies that are structurally independent or bodies endowed with functional autonomy *vis-à-vis* the budgetary authorities of the Member State, and which are underpinned by national legal provisions ensuring a high degree                        of functional autonomy and accountability, including:                  

a statutory regime grounded in national laws, regulations or binding administrative provisions;

not taking instructions from the budgetary authorities of the Member State concerned or from any other public or private body;

the capacity to communicate publicly in a timely manner;

procedures for nominating members on the basis of their experience and competence;

adequate resources and appropriate access to information to carry out their mandate;

(b)‘independent macroeconomic forecasts’ means macroeconomic forecasts produced or endorsed by independent bodies;                  

(c)‘medium-term budgetary framework’ means medium-term budgetary framework as described in point (e) of Article 2 of Directive                        2011/85/EU;                  

(d)‘stability programme’ means stability programme as described in Article 3 of Regulation (EC) No 1466/97.                  

In order to ensure consistency across the independent macroeconomic forecasts referred to in point (b) of the first subparagraph,                     the Member States and the Commission shall, at least annually, engage in a technical dialogue concerning the assumptions underpinning                     the preparation of macroeconomic and budgetary forecasts in accordance with Article 4(5) of Directive 2011/85/EU.                  

2.The definitions of ‘general government sector’ and of ‘subsectors of the general government sector’, set out in point 2.70                        of Annex A to Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community(10) shall also apply to this Regulation.                  

3.The application of this Regulation is without prejudice to Article 9 TFEU.                  

## CHAPTER IIU.K.**ECONOMIC POLICY COORDINATION**

### Article 3U.K.Consistency with the framework for economic policy coordination

The Member States' budgetary procedure shall be consistent with:

the framework for economic policy coordination in the context of the annual cycle of surveillance, which includes, in particular,                              the general guidance to Member States issued by the Commission and the European Council at the beginning of the cycle;                           

the recommendations issued in the context of the SGP;

where appropriate, recommendations issued in the context of the annual cycle of surveillance, including the macroeconomic                              imbalances procedure as established by Regulation (EU) No 1176/2011; and                           

where appropriate, opinions on economic partnership programmes, as referred to in Article 9.

## CHAPTER IIIU.K.**COMMON BUDGETARY PROVISIONS**

### Article 4U.K.Common budgetary timeline

1.Member States shall, in the context of the European Semester, make public, preferably by 15 April but no later than 30 April                        each year, their national medium-term fiscal plans in accordance with their medium-term budgetary framework. Such plans shall                        include at least all the information to be provided in their stability programmes and shall be presented together with their                        national reform programmes and the stability programmes. Such plans shall be consistent with the framework for economic policy                        coordination in the context of the annual cycle of surveillance, which includes, in particular, the general guidance to Member                        States issued by the Commission and the European Council at the beginning of the cycle. They shall also be consistent with                        the recommendations issued in the context of the SGP and, where appropriate, with recommendations issued in the context of                        the annual cycle of surveillance, including the macroeconomic imbalances procedure as established by Regulation (EU) No 1176/2011,                        and with opinions on economic partnership programmes referred to in Article 9.                  

National medium-term fiscal plans and national reform programmes shall include indications on how the reforms and measures                     set out are expected to contribute to the achievement of the targets and national commitments established within the framework                     of the Union's strategy for growth and jobs. Furthermore, national medium-term fiscal plans or national reform programmes                     shall include indications on the expected economic returns on non-defence public investment projects that have a significant                     budgetary impact. National medium-term fiscal plans and stability programmes may be the same document.                  

2.The draft budget for the forthcoming year for the central government and the main parameters of the draft budgets for all                        the other subsectors of the general government shall be made public annually not later than 15 October.                  

3.The budget for the central government shall be adopted or fixed upon and made public annually not later than 31 December together                        with the updated main budgetary parameters for the other sub-sectors of the general government. Member States shall have in                        place reversionary budget procedures to be applied if, for objective reasons beyond the control of the government, the budget                        is not adopted or fixed upon and made public by 31 December.                  

4.National medium-term fiscal plans and draft budgets referred to in paragraphs 1 and 2 shall be based on independent macroeconomic                        forecasts, and shall indicate whether the budgetary forecasts have been produced or endorsed by an independent body. Those                        forecasts shall be made public together with the national medium-term fiscal plans and the draft budgets that they underpin.                  

### Article 5U.K.Independent bodies monitoring compliance with fiscal rules

1.Member States shall have in place independent bodies for monitoring compliance with:                  

(a)numerical fiscal rules incorporating in the national budgetary processes their medium-term budgetary objective as established                        in Article 2a of Regulation (EC) No 1466/97;                  

(b)numerical fiscal rules as referred to in Article 5 of Directive 2011/85/EU.                  

2.Those bodies shall, where appropriate, provide public assessments with respect to national fiscal rules, inter alia relating                        to:                  

(a)the occurrence of circumstances leading to the activation of the correction mechanism for cases of significant observed deviation                        from the medium-term objective or the adjustment path towards it in accordance with Article 6(2) of Regulation (EC) No 1466/97;                  

(b)whether the budgetary correction is proceeding in accordance with national rules and plans;                  

(c)any occurrence or cessation of circumstances referred to in the tenth subparagraph of Article 5(1) of Regulation (EC) No 1466/97                        which may allow a temporary deviation from the medium-term budgetary objective or the adjustment path towards it, provided                        that such a deviation does not endanger fiscal sustainability in the medium term.                  

## CHAPTER IVU.K.**MONITORING AND ASSESSMENT OF MEMBER STATES DRAFT BUDGETARY PLANS**

### Article 6U.K.Monitoring requirements

1.Member States shall submit annually to the Commission and to the Eurogroup a draft budgetary plan for the forthcoming year                        by 15 October. That draft budgetary plan shall be consistent with the recommendations issued in the context of the SGP and,                        where applicable, with recommendations issued in the context of the annual cycle of surveillance, including the macroeconomic                        imbalances procedure as established by Regulation (EU) No 1176/2011, and with opinions on the economic partnership programmes                        referred to in Article 9.                  

2.As soon as the draft budgetary plans referred to in paragraph 1 have been submitted to the Commission, they shall be made                        public.                  

3.The draft budgetary plan shall contain the following information for the forthcoming year:                  

(a)the targeted budget balance for the general government as a percentage of Gross Domestic Product (GDP), broken down by subsector                        of general government;                  

(b)the projections at unchanged policies for expenditure and revenue as a percentage of GDP for the general government and their                        main components, including gross fixed capital formation;                  

(c)the targeted expenditure and revenue as a percentage of GDP for the general government and their main components, taking into                        account the conditions and criteria to establish the growth path of government expenditure net of discretionary revenue measures                        under Article 5(1) of Regulation (EC) No 1466/97;                  

(d)relevant information on the general government expenditure by function, including on education, healthcare and employment,                        and, where possible, indications on the expected distributional impact of the main expenditure and revenue measures;                  

(e)a description and quantification of the expenditure and revenue measures to be included in the draft budget for the year to                        come at the level of each subsector in order to bridge the gap between the targets referred to in point (c) and the projections                        at unchanged policies provided in accordance with point (b);                  

(f)the main assumptions of the independent macroeconomic forecasts and important economic developments which are relevant to                        the achievement of the budgetary targets;                  

(g)an annex containing the methodology, economic models and assumptions, and any other relevant parameters underpinning the budgetary                        forecasts and the estimated impact of aggregated budgetary measures on economic growth;                  

(h)indications on how reforms and measures in the draft budgetary plan, including in particular public investment, address the                        current recommendations to the Member State concerned in accordance with Articles 121 and 148 TFEU and are instrumental to                        the achievement of the targets set by the Union's strategy for growth and jobs.                  

The description referred to in point (e) of the first subparagraph may be less detailed for measures with a budgetary impact                     estimated to be lower than 0,1 % of GDP. Particular and explicit attention shall be paid to major fiscal policy reform plans                     with potential spill-over effects for other Member States whose currency is the euro.                  

4.Where the budgetary targets reported in the draft budgetary plan in accordance with paragraph 3 or the projections at unchanged                        policies differ from those in the most recent stability programme, the differences shall be duly explained.                  

5.The specification of the content of the draft budgetary plan shall be set out in a harmonised framework established by the                        Commission in cooperation with the Member States.                  

### Article 7U.K.Assessment of the draft budgetary plan

1.The Commission shall adopt an opinion on the draft budgetary plan as soon as possible and in any event by 30 November.                  

2.Notwithstanding paragraph 1, where, in exceptional cases, after consulting the Member State concerned within one week of submission                        of the draft budgetary plan, the Commission identifies particularly serious non-compliance with the budgetary policy obligations                        laid down in the SGP, the Commission shall adopt its opinion within two weeks of submission of the draft budgetary plan. In                        its opinion, the Commission shall request that a revised draft budgetary plan be submitted as soon as possible and in any                        event within three weeks of the date of its opinion. The Commission's request shall be reasoned and shall be made public.                  

Article 6(2), (3) and (4) shall apply to revised draft budgetary plans submitted pursuant to the first subparagraph of this                     paragraph.                  

The Commission shall adopt a new opinion on the revised draft budgetary plan as soon as possible and in any event within three                     weeks of submission of the revised draft budgetary plan.                  

3.The Commission's opinion shall be made public and shall be presented to the Eurogroup. Thereafter, at the request of the parliament                        of the Member State concerned or of the European Parliament, the Commission shall present its opinion to the parliament making                        the request.                  

4.The Commission shall make an overall assessment of the budgetary situation and prospects in the euro area as a whole, on the                        basis of the national budgetary prospects and their interaction across the area, relying on the most recent economic forecasts                        of the Commission services.                  

The overall assessment shall include sensitivity analyses that provide an indication of the risks to public finance sustainability                     in the event of adverse economic, financial or budgetary developments. It shall also, as appropriate, outline measures to                     reinforce the coordination of budgetary and macroeconomic policy at the euro area level.                  

The overall assessment shall be made public and shall be taken into account in the annual general guidance to Member States                     issued by the Commission.                  

The methodology (including models) and assumptions of the most recent economic forecasts of the Commission services for each                     Member State, including estimates of the impact of aggregated budgetary measures on economic growth, shall be annexed to the                     overall assessment.                  

5.The Eurogroup shall discuss opinions of the Commission on the draft budgetary plans and the budgetary situation and prospects                        in the euro area as a whole on the basis of the overall assessment made by the Commission in accordance with paragraph 4.                        The results of those discussions of the Eurogroup shall be made public where appropriate.                  

### Article 8U.K.Reporting on debt issuance

1.Member States shall report to the Commission and the Eurogroup, *ex ante* and in a timely manner, on their national debt issuance plans.                  

2.The harmonised form and content of the report referred to in paragraph 1 shall be laid down by the Commission, in cooperation                        with the Member States.                  

## CHAPTER VU.K.**ENSURING THE CORRECTION OF EXCESSIVE DEFICIT**

### Article 9U.K.Economic partnership programmes

1.If the Council, acting under Article 126(6) TFEU, decides that an excessive deficit exists in a Member State, the Member State                        concerned shall present to the Commission and to the Council an economic partnership programme describing the policy measures                        and structural reforms that are needed to ensure an effective and lasting correction of the excessive deficit, as a development                        of its national reform programme and its stability programme, and fully taking into account the Council recommendations on                        the implementation of the integrated guidelines for the economic and employment policies of the Member State concerned.                  

2.The economic partnership programme shall identify and select a number of specific priorities aiming to enhance competitiveness                        and long-term sustainable growth and addressing structural weaknesses in the Member State concerned. Those priorities shall                        be consistent with the Union’s strategy for growth and jobs. Where appropriate, potential financial resources shall be identified,                        including credit lines of the European Investment Bank and other relevant financial instruments, as appropriate.                  

3.The economic partnership programme shall be presented at the same time as the report provided for in Article 3(4a) of Regulation                        (EC) No 1467/97.                  

4.The Council, acting on a proposal from the Commission, shall adopt an opinion on the economic partnership programme.                  

5.A corrective action plan as referred to in Article 8(1) of Regulation (EU) No 1176/2011 may be amended in accordance with                        Article 9(4) of that Regulation to replace the economic partnership programme provided for in this Article. Where such a corrective                        action plan is submitted after the adoption of an economic partnership programme, the measures set out in the economic partnership                        programme may, as appropriate, be included in the corrective action plan.                  

6.The implementation of the programme, and the annual budgetary plans consistent with it, shall be monitored by the Council                        and by the Commission.                  

### Article 10U.K.Reporting requirements for Member States in excessive deficit procedure

1.Where the Council decides in accordance with Article 126(6) TFEU that an excessive deficit exists in a Member State, the Member                        State concerned shall, on a request from the Commission, be subject to reporting requirements in accordance with paragraphs                        2 to 5 of this Article, until the abrogation of its excessive deficit procedure.                  

2.The Member State shall carry out a comprehensive assessment of in-year budgetary execution for the general government and                        its subsectors. The financial risks associated with contingent liabilities with potentially large impacts on public budgets,                        as referred to in Article 14(3) of Directive 2011/85/EU shall also be covered by the assessment to the extent that they may                        contribute to the existence of an excessive deficit. The result of that assessment shall be included in the report submitted                        in accordance with Article 3(4a) or Article 5(1a) of Regulation (EC) No 1467/97 on action taken to correct the excessive deficit.                  

3.The Member State shall report regularly to the Commission and to the Economic and Financial Committee, for the general government                        and its subsectors, the in-year budgetary execution, the budgetary impact of discretionary measures taken on both the expenditure                        and the revenue side, targets for the government expenditure and revenues, and information on the measures adopted and the                        nature of those envisaged to achieve the targets. The report shall be made public.                  

The Commission shall be empowered to adopt delegated acts in accordance with Article 14 specifying the content of the regular                     reporting referred to in this paragraph.                  

4.If the Member State concerned is the subject of a Council recommendation under Article 126(7) TFEU, the report referred to                        in paragraph 3 of this Article shall be submitted for the first time six months after the report provided for in Article 3(4a)                        of Regulation (EC) No 1467/97, and thereafter on a six-monthly basis.                  

5.If the Member State concerned is the subject of a Council decision to give notice under Article 126(9) TFEU, the report in                        accordance with paragraph 3 of this Article shall also contain information on the actions being taken in response to the specific                        Council notice. It shall be submitted for the first time three months after the report provided for in Article 5(1a) of Regulation                        (EC) No 1467/97, and thereafter on a quarterly basis.                  

6.Upon request and within the deadline set by the Commission, a Member State subject to an excessive deficit procedure shall:                  

(a)carry out and report on a comprehensive independent audit of the public accounts of all subsectors of the general government                        conducted preferably in coordination with national supreme audit institutions, aiming to assess the reliability, completeness                        and accuracy of those public accounts for the purposes of the excessive deficit procedure;                  

(b)provide available additional information for the purposes of monitoring progress towards the correction of the excessive deficit.                  

The Commission (Eurostat) shall assess the quality of statistical data reported by the Member State concerned under point                     (a) in accordance with Council Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on the excessive                     deficit procedure annexed to the Treaty establishing the European Community(11).                  

### Article 11U.K.Member States at risk of non-compliance with their obligation under their excessive deficit procedure

1.When assessing whether compliance with the deadline to correct the excessive deficit, as established by a Council recommendation                        under Article 126(7) TFEU or a Council decision to give notice under Article 126(9) TFEU, is at risk, the Commission shall                        base its assessment, inter alia, on the reports submitted by the Member States in accordance with Article 10(3) of this Regulation.                  

2.In the case of a risk of non-compliance with the deadline to correct the excessive deficit, the Commission shall address a                        recommendation to the Member State concerned regarding full implementation of the measures provided for in the recommendation                        or decision to give notice referred to in paragraph 1, adoption of other measures, or both, within a timeframe consistent                        with the deadline for the correction of its excessive deficit. The recommendation by the Commission shall be made public and                        shall be presented to the Economic and Financial Committee. At the request of the parliament of the Member State concerned,                        the Commission shall present the recommendation to that parliament.                  

3.Within the timeframe set by the Commission recommendation referred to in paragraph 2, the Member State concerned shall report                        to the Commission on measures adopted in response to that recommendation together with the reports provided for in Article                        10(3). The report shall include the budgetary impact of all discretionary measures taken, targets for the government expenditure                        and revenues, information on the measures adopted and the nature of those envisaged to achieve the targets, and information                        on the other actions being taken in response to the Commission recommendation. The report shall be made public and shall be                        presented to the Economic and Financial Committee.                  

4.On the basis of the report referred to in paragraph 3, the Commission shall assess whether the Member State has complied with                        the recommendation referred to in paragraph 2.                  

### Article 12U.K.Impact on the excessive deficit procedure

1.The extent to which the Member State concerned has taken into account the Commission's opinion referred to in Article 7(1)                        shall be taken into account by:                  

(a)the Commission when conducting a report under Article 126(3) TFEU and when recommending the imposition of a non-interest bearing                        deposit in accordance with Article 5 of Regulation (EU) No 1173/2011;                  

(b)the Council when deciding whether an excessive deficit exists in accordance with Article 126(6) TFEU.                  

2.The monitoring established by Articles 10 and 11 of this Regulation shall be an integral part of the regular monitoring, as                        provided for in Article 10(1) of Regulation (EC) No 1467/97, of the implementation of action taken by the Member State concerned                        in response to Council recommendations under Article 126(7) TFEU or Council decisions to give notice under Article 126(9)                        TFEU to correct the excessive deficit.                  

3.When considering whether effective action has been taken in response to recommendations under Article 126(7) TFEU or to decisions                        to give notice under Article 126(9) TFEU, the Commission shall take into account the assessment referred to in Article 11(4)                        in this Regulation and shall recommend, as appropriate, that the Council take decisions under Article 126(8) or Article 126(11)                        TFEU, giving due consideration to Article 3(5) and Article 5(2) of Regulation (EC) No 1467/97.                  

### Article 13U.K.Consistency with Regulation (EU) No 472/2013(12) 

Member States subject to a macroeconomic adjustment programme shall not be subject to Articles 6 to 12 of this Regulation.

## CHAPTER VIU.K.**FINAL PROVISIONS**

### Article 14U.K.Exercise of the delegation

1.The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.                  

2.The power to adopt delegated acts referred to in Article 10(3) shall be conferred on the Commission for a period of three                        years from 30 May 2013. The Commission shall draw up a report in respect of the delegation of power not later than nine months                        before the end of the three-year period. The delegation of power shall be tacitly extended for periods of an identical duration,                        unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.                  

3.The delegation of power referred to in Article 10(3) may be revoked at any time by the European Parliament or by the Council.                        A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the                        day following the publication of the decision in the *Official Journal of the European Union* or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.                  

4.As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the                        Council.                  

5.A delegated act adopted pursuant to Article 10(3) shall enter into force only if no objection has been expressed either by                        the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament                        and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission                        that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of                        the Council.                  

### Article 15U.K.Economic Dialogue

1.In order to enhance the dialogue between the Union institutions, in particular the European Parliament, the Council and the                        Commission, and to ensure greater transparency and accountability, the competent committee of the European Parliament may                        invite, where appropriate, the President of the Council, the Commission, the President of the European Council or the President                        of the Eurogroup to appear before the committee to discuss:                  

(a)the specification of the content of the draft budgetary plan as set out in a harmonised framework established in accordance                        with Article 6(5);                  

(b)the results of the discussion of the Eurogroup on the Commission opinions adopted in accordance with Article 7(1), to the                        extent that they have been made public;                  

(c)the overall assessment of the budgetary situation and prospects in the euro area as a whole made by the Commission in accordance                        with Article 7(4);                  

(d)Council acts referred to in Article 9(4) and in Article 12(3).                  

2.The competent committee of the European Parliament may offer the opportunity to the Member State that is the subject of a                        Commission recommendation under Article 11(2) or Council acts as referred to in paragraph 1(d) to participate in an exchange                        of views.                  

3.The European Parliament shall be duly involved in the European Semester in order to increase the transparency and ownership                        of, and the accountability for the decisions taken, in particular by means of the economic dialogue carried out pursuant to                        this Article.                  

### Article 16U.K.Review and reports on the application of this Regulation

1.By 14 December 2014, and every five years thereafter, the Commission shall submit to the European Parliament and to the Council                        a report on the application of this Regulation, accompanied, where appropriate, by a proposal to amend this Regulation. The                        Commission shall make that report public.                  

The reports referred to in the first subparagraph shall evaluate, inter alia:

(a)the effectiveness of this Regulation;                  

(b)progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member                        States in accordance with the TFEU;                  

(c)the contribution of this Regulation to the achievement of the Union’s strategy for growth and jobs.                  

2.By 31 July 2013, the Commission shall report on the possibilities offered by the Union's existing fiscal framework to balance                        productive public investment needs with fiscal discipline objectives in the preventive arm of the SGP, while complying with                        it fully.                  

### Article 17U.K.Transitional provisions

1.Member States already subject to an excessive deficit procedure at the time of the entry into force of this Regulation shall                        comply with the regular reporting in accordance with Article 10(3), (4) and (5) by 31 October 2013.                  

2.Article 9(1) and Article 10(2) shall apply to Member States that are already subject to an excessive deficit procedure at                        the time of the entry into force of this Regulation only when a Council recommendation in accordance with Article 126(7) TFEU,                        or a Council decision to give notice in accordance with Article 126(9) TFEU, is taken after 30 May 2013.                  

In such cases, the economic partnership programme shall be presented simultaneously with the report submitted in accordance                     with Article 3(4a) or Article 5(1a) of Regulation (EC) No 1467/97.                  

3.Member States shall comply with Article 5 by 31 October 2013.                  

### Article 18U.K.Entry into force

This Regulation shall enter into force on the third day following that of its publication in the *Official Journal of the European Union*.                  

This Regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaties.

Done at Strasbourg, 21 May 2013.

*For the European Parliament*                            

*The President*                            

M. Schulz                            

*For the Council*                            

*The President*                            

L. Creighton                            

1

OJ C 141, 17.5.2012, p. 7.                           

2

Position of the European Parliament of 12 March 2013 (not yet published in the Official Journal) and decision of the Council                              of 13 May 2013.                           

3

OJ L 209, 2.8.1997, p. 1.                           

4

OJ L 209, 2.8.1997, p. 6.                           

5

OJ L 306, 23.11.2011, p. 12.                           

6

OJ L 306, 23.11.2011, p. 33.                           

7

OJ L 306, 23.11.2011, p. 1.                           

8

OJ L 306, 23.11.2011, p. 25.                           

9

OJ L 306, 23.11.2011, p. 41.                           

10

OJ L 310, 30.11.1996, p. 1.                           

11

OJ L 145, 10.6.2009, p. 1.                           

12

Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic                              and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect                              to their financial stability (see page 1 of this Official Journal).