EN   EN 
 
 
 EUROPEAN  
COMMISSION   
Brussels, 23.5.2018  
COM(2018) 433 final  
Limited to Cabinets - 
Embargo until adoption  
Recommendation for a  
COUNCIL DECISION  
abrogating Decision 2009/414/EC on the existence of an excessive deficit in France   
 
EN 1  EN  
 
Recommendation for a  
COUNCIL DECISION  
abrogating Decision 2009/414/EC on the existence of an excessive deficit in France  
THE COUNCIL OF THE EUROPEAN UNION,  
Having regard to the Treaty on the Functioning of the European Union, and in particular 
Article 126(12) thereof,  
Having regard to the recommendation from the Commission,  
Whereas:  
(1) On 27 April 2009, following a recommendation from the Com mission, the Council 
decided, by Decision 2009/414/EC1, in accordance with Article 126(6) of the Treaty, 
that an excessive deficit existed in France. The Council noted that the general 
government deficit notified for 2008 was 3.2% of GDP, thus above the 3% -of-GDP 
Treaty reference value. The general government gross debt (which had been above the 
60%-of-GDP Treaty reference value since 2003) was planned to reach 66.7% of GDP 
in 2008.  
(2) On the same date, in accordance with Article 126(7) of the Treaty and Article 3(4) of 
Regulation (EC) No 1467/972, the Council, based on a recommendation from the 
Commission, issued a recommendation to France with a view to bringing the 
excessive deficit situation to an end by 2012 at the latest3. The Council also set a 
dead line of 27 October 2009 for effective action to be taken.  
(3) Thereafter the Council addressed a new recommendation to France on 2 December 
2009 on the basis of Article 126(7) of the Treaty, which extended the deadline for 
correcting the excessive deficit to 2013. The Council considered that France had taken 
effective action, but unexpected adverse economic events with major unfavourable 
consequences for government finances had occurred.  
(4) On 21 June 2013, on the basis of Article 126(7) of the Treaty, th e Council addressed a 
new recommendation to France, which extended the deadline for correcting the 
excessive deficit to 2015. The Council considered that the available evidence did not 
allow to conclude on no effective action, but unexpected adverse econom ic events 
with major unfavourable consequences for government finances had occurred.  
                                                 
1 Council Decision 2009/414/EC of 27 April 2009 on the existence of an excessive deficit in France (OJ 
L 135, 30.5.2009, p. 19).  
2 Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation 
of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6).  
3 All documents related to the excessive deficit procedure of France can be found at: 
https://ec.europa.eu/info/business -economy -euro/economic -and-fiscal -policy -coordination/eu -
economic -governance -monitoring -prevention -correction/stability -and-growth -pact/corrective -arm-
excessive -deficit -procedure/ongoing -excessive -deficit -procedures/france_en#ongoing -procedure.  
 
EN 2  EN (5) Thereafter, on 10 March 2015 the Council under Article 126(7) of the Treaty issued a 
new recommendation to France with a view to bringing an end to the excessive defi cit 
situation by 2017. The Council established the deadline of 10 June 2015 for France to 
report in detail on action taken.  
(6) On 1 July 2015, the Commission concluded that the headline deficit targets for France 
were expected to be met both in 2015 and 2 016, while the projected fiscal effort, 
according to all metrics, was projected to fall short of the recommended ones in 2015 
and 2016. Therefore, according to the methodology for assessing effective action, the 
Commission considered that the procedure was  to be held in abeyance.  
(7) In accordance with Article 4 of the Protocol on the excessive deficit procedure 
annexed to the Treaties, the Commission provides the data for the implementation of 
the procedure. As part of the application of that Protocol, Member States are to notify 
data on government deficits and d ebt and other associated variables twice a year, 
namely before 1 April and before 1 October, in accordance with Article 3 of 
Regulation (EC) No 479/20094.  
(8) The Council should take a decision to abrogate a decision on the existence of an 
excessive defic it on the basis of notified data. Moreover, a decision on the existence of 
an excessive deficit should be abrogated only if the Commission forecasts indicate that 
the deficit will not exceed the 3%-of-GDP Treaty reference value over the forecast 
horizon5. 
(9) Based on data provided by the Commission (Eurostat) in accordance with Article 14 
of Regulation (EC) No 479/2009, following the April 2018 notification 6 by France, 
the 2018 Stability Programme and the Commission 2018 spring forecast, the following 
conclusions are warranted:  
– After reaching 3.4% of GDP in 2016, the general government deficit was 
reduced to 2.6% of GDP in 2017. As compared to the 2017 budget targets,  the 
deficit reduction in that year was mainly driven by the buoyancy of tax 
revenues (0.7% of GDP) , especially VAT and corporate taxes .  
– The Stability Programme for 2018 -2022, submitted by the French government 
on 25 April 2018, plans the general government deficit to decline to 2.3% of 
GDP in 2018 and to slightly increase to 2.4% of GDP in 20 19. The 
Commission 2018 spring forecast projects a deficit of 2.3% of GDP in 2018 
and 2.8% of GDP in 2019, thus remaining below the 3% -of-GDP Treaty 
reference value over the forecast horizon.  
– The structural balance, which is the general government balance  adjusted for 
the economic cycle and net of one -off and other temporary measures, improved 
                                                 
4 Council Regulation (EC) No 479/2009 of 25 May 2009 o n the application of the Protocol on the 
excessive deficit procedure annexed to the Treaty establishing the European Community  (OJ L 145, 
10.6.2009, p. 1). 
5 In line with the “Specifications on the implementation of the Stability and Growth Pact and guidel ines 
on the format and content of stability and convergence programmes”, adopted by the Economic and 
Financial Committee on 15 May 2017, available at:  
http://data.consilium.europa.eu/doc/document/ST -9344 -2017 -INIT/en/pdf  
6 Eurostat has expressed a reservat ion on the quality of the data reported by France. Firstly, Eurostat 
considers that the Agence Française de Développement should be classified inside the general 
government sector, which would result in an increase in government debt. Secondly, Eurostat co nsiders 
that the capital injection by the State into AREVA (0.1% of GDP) in 2017 should be treated as a capital 
transfer, with an impact on the deficit.  
 
EN 3  EN by 0.5% of GDP in 2017 . The accumulated improvement in the structural 
balance since 2015 amounted to 0.7% of GDP.  
– The gross government debt -to-GDP increased to 97.0 % in 2017, from 96.6% in 
2016, mainly due to the debt -increasing stock -flow adjustments as the primary 
deficit and interest payments were broadly offset by the debt -reducing impact 
of real growth and inflation. The Commission 2018 spring forecast projects the 
debt ratio to decrease to 96.4% in 2018 and 96.0% in 2019 mainly due to high 
nominal growth that outweighs the primary deficits and interest payments.  
(10) In accordance with Article 126(12) of the Treaty, a Council Decision on the existence 
of an exc essive deficit is to be abrogated when the excessive deficit in the Member 
State concerned has, in the view of the Council, been corrected.  
(11) In the view of the Council, the excessive deficit in France has been corrected and 
Decision 2009/414/EC  should therefore be abrogated.  
(12) As from 2018, the year following the correction of the excessive deficit, France is 
subject to the preventive arm of the Stability and Growth Pact and should progress 
towards its medium -term budgetary objective at an appropriat e pace, including 
respecting the expenditure benchmark, and comply with the  debt criterion in 
accordance with Article 2(1a) of Regulation (EC) No 1467/97,  
 
HAS ADOPTED THIS DECISION:  
Article 1  
From an overall assessment it follows that the excessive deficit situation in France has been 
corrected.  
Article 2 
Decision 2009/414/EC is hereby abrogated.  
Article 3 
This Decision is addressed to the French Republic.  
Done at Brussels,  
 For the Council  
 The President