Proposal for a Council Regulation on speeding up and clarifying the implementation of the excessive deficit procedure (COM(96)0496 - C4-0577/96 - 96/0248(CNS))

The proposal was approved with the following amendments:

(Amendment 35)

Recital -1 (new)

>Text following EP vote>

(-1) Whereas if EMU is to function smoothly, it is necessary not only that the convergence criteria be fulfilled -whose fulfilment may depend on cyclical economic factors- but also that economic and fiscal performances prove stable and durable;

(Amendment 36)

Recital 1

>Original text>

(1) Whereas the maintenance of sound budgetary positions in the Member States creates the appropriate conditions for the sustained growth of output and employment; whereas budgetary discipline will be required in the third stage of economic and monetary union to ensure monetary stability;

>Text following EP vote>

(1) Whereas the maintenance of sound budgetary positions in the Member States contributes in the medium and long-term to the creation of the appropriate conditions for the sustained growth of output and employment; whereas budgetary discipline will also contribute greatly, in the third stage of economic and monetary union to the monetary stability;

(Amendment 71)

Recital 2

>Original text>

(2) Whereas national budgetary policies need to be set so as to create room for manoeuvre in adapting to exceptional and cyclical disturbances and so as to avoid excessive deficits, whereas there is a case for giving a rigorous interpretation to the concept of exception and temporary circumstances which could involve quantifying the concept of significantly negative real growth;

>Text following EP vote>

(2) Whereas national budgetary policies need to be set so as to create room for manoeuvre in adapting to exceptional and cyclical disturbances including those resulting from the application of constitutional laws, and so as to avoid excessive deficits, whereas there is a case for giving a realistic and rigorous interpretation to the concept of exception and temporary circumstances, having regard to differing economic circumstances in the various Member States and at international level, which should also allow for unusual events, economic or otherwise, to be taken into account; whereas unusual events linked to safeguarding the territorial sovereignty of a Member State should be taken into consideration as well;

(Amendment 39)

Recital 2a (new)

>Text following EP vote>

(2a) Whereas national budgetary policies need also to be set so as to allow adequate government investment to help sustain growth and employment;

(Amendment 40)

Recital 4

>Original text>

(4) Whereas, according to Article 109k(3), Articles 104c(9) and (11) only apply to those Member States having adopted a single currency;

>Text following EP vote>

(4) Whereas, according to Article 109k(3), Articles 104c(9) and (11) only apply to those Member States having adopted a single currency, and may in no way whatsoever affect the terms of eventual admission of Member States possessing a derogation or opt-out;

(Amendment 41)

Recital 8

>Original text>

(8) Whereas the reinforced surveillance in the terms of Regulation [...] together with the Commission's monitoring of budgetary positions in accordance with paragraph 2 of Article 104c provide a basis for a rapid implementation of the excessive deficit procedure;

>Text following EP vote>

(8) Whereas the reinforced surveillance in the terms of Council Regulation [...] together with the Commission's monitoring of budgetary positions in accordance with paragraphs 2, 3 and 5 of Article 104c and the opinion of the Committee provided for in Article 109c provide a basis for a rapid implementation of the excessive deficit procedure;

(Amendment 42)

Recital 9

>Original text>

(9) Whereas, in the light of the above, an overall maximum period of ten months from the reporting date or any other activation of the procedure until, if necessary, the imposition of sanctions seems both feasible and appropriate in order to exert pressure on the Member State to implement corrective measures; in the event of a procedure starting in March this could lead to sanctions being imposed within the calendar year in which the procedure has been started;

>Text following EP vote>

(9) Whereas, in the light of the above, an overall maximum period of twelve months from the reporting date or any other activation of the procedure until, if necessary, the imposition of sanctions seems both feasible and appropriate in order to exert pressure on the Member State to implement corrective measures;

(Amendment 43)

Recital 11

>Original text>

(11) Whereas when acting with a view to correct the excessive deficit the government of the Member State concerned will, if required by national law, take measures associating the national parliament; whereas the national decision- making process in accordance with article 3 of the Protocol no 5, should not, as such, hinder the expeditious implementation of the excessive deficit procedure;

>Text following EP vote>

(11) Whereas when acting with a view to correcting the excessive deficit the government of the Member State concerned will, if required by national law, take measures associating the national parliament; whereas the excessive deficit procedure should enable parliaments to play their full role the national decision-making process in accordance with Article 3 of Protocol no 5, should not, as such, hinder the expeditious implementation of the excessive deficit procedure;

(Amendment 44)

Recital 11a (new)

>Text following EP vote>

(11a) Whereas prior to any Council decision to make its recommendations public the European Parliament should be informed;

(Amendment 45)

Recital 13a (new)

>Text following EP vote>

(13a) Whereas it is appropriate that the amount of the deposit or fine should not be considered as part of the government expenditure of the Member State concerned;

(Amendment 46)

Recital 17a (new)

>Text following EP vote>

(17a) Whereas the financial rules in force must be adapted accordingly with a view to the budgetization and the entry in the accounts of fines and interest on any deposits which may be lodged;

(Amendment 47)

Article -1 (new)

>Text following EP vote>

Article -1

This Regulation sets out the provisions concerning the implementation of the excessive deficit procedure, having as an objective the avoidance of excessive government deficits.

(Amendment 48)

Article 1(1)

>Original text>

1. The Council shall decide on the existence of an excessive deficit in accordance with Article 104c(6), within three months of the reporting dates established in Articles 4.2 and 4.3 of Council Regulation EC/3605/93. Where it decides on the existence of an excessive deficit in accordance with Article 104c(6) the Council shall issue recommendations to the Member State concerned in accordance with Article 104c(7) at the same time.

>Text following EP vote>

1. The Council shall decide on the existence of an excessive deficit, after an opinion by the Commission based on the procedure laid down in Article 104c(2) (3) and (5) and an opinion by the Committee provided for in Article 109c, in accordance with Article 104c(6), within three months of the reporting dates established in Articles 4.2 and 4.3 of Council Regulation EC/3605/93. Where it decides on the existence of an excessive deficit in accordance with Article 104c(6) the Council shall issue recommendations to the Member State concerned in accordance with Article 104c(7) at the same time.

(Amendment 72)

Article 1(2)

>Original text>

2. The excess of a government deficit over the reference value shall be considered exceptional and temporary, in accordance with Article 104c(2a) 2nd indent, when resulting from an unusual event outside the control of the relevant Member State and which has a major impact on the financial position of the general government, or when resulting from a severe economic downturn, in particular in the case of significantly negative annual real growth. In addition, if the unusual event or the severe economic downturn has come to an end or if it is forecast that it will come to an end in the calendar year following the year in which the deficit exceeds the reference value, budgetary forecasts provided by the Commission must indicate that the deficit would fall below the reference value in this same following year.

>Text following EP vote>

2. The excess of a government deficit over the reference value shall be considered exceptional and temporary, in accordance with Article 104c(2)(a) 2nd indent and with Article 104c(3), when resulting from an unusual event, economic or otherwise, outside the control of the relevant Member State and which has a major impact on the financial position of the general government, or induces the Member State concerned to engage, for example, in excessively high expenditure in order to safeguard its territorial sovereignty, or when resulting from a severe economic downturn, in particular in the case of significant negative annual real growth. In addition, if the unusual event or the severe economic downturn has come to an end or if it is forecast that it will come to an end in the calendar year following the year in which the deficit exceeds the reference value, budgetary forecasts provided by the Commission must indicate that the deficit would fall below the reference value within the time period set down in the Stability Programme which has been endorsed by the Council.

(Amendment 50)

Article 2(1)

>Original text>

1. Any Council decision to make its recommendations public having established that no effective action has been taken in accordance with Article 104c(8) shall be taken within four months of the decision on the existence of an excessive deficit taken in accordance with Article 104c(6) and the issuing of recommendations in accordance with Article 104c(7).

>Text following EP vote>

1. Any Council decision to make its recommendations public having established that no effective action has been taken in accordance with Article 104c(8) and after informing the European Parliament, shall be taken within five months of the decision on the existence of an excessive deficit taken in accordance with Article 104c(6) and the issuing of recommendations in accordance with Article 104c(7).

(Amendment 51)

Article 3

>Original text>

Any Council decision to give notice to the Member State to take measures for the deficit reduction in accordance with Article 104c(9) shall be taken within one month of the Council decision that no effective action has been taken in accordance with Article 104c(8).

>Text following EP vote>

Any Council decision to give notice to the Member State to take measures for the deficit reduction in accordance with Article 104c(9) shall be taken within two months of the Council decision that no effective action has been taken in accordance with Article 104c(8).

(Amendment 52)

Article 5

>Original text>

The total time between the reporting dates referred to in Article 1 of this Regulation and a Council decision on the imposition of sanctions referred to in Article 4 of this Regulation shall not exceed ten months.

>Text following EP vote>

The total time between the reporting dates referred to in Article 1 of this Regulation and a Council decision on the imposition of sanctions referred to in Article 4 of this Regulation shall not exceed twelve months.

(Amendment 73)

Article 7

>Original text>

Whenever the Council decides to apply sanctions to a Member State in accordance with Article 104c(11), a non-interest-bearing deposit would, as a rule, be required. The Council may decide to supplement this deposit by the measures foreseen in the first and second indents of Article 104c(11).

>Text following EP vote>

Whenever the Council decides to apply sanctions to a Member State in accordance with Article 104c(11), a non-interest-bearing deposit would in principle be required. The Council may decide to proceed to or supplement this deposit by the measures foreseen in the first and second indents of Article 104c(11).

(Amendment 74)

Article 8, 3rd paragraph (new)

>Text following EP vote>

The amount of the deposit or fine shall not be considered as part of the government expenditure of the Member State concerned.

(Amendment 55)

Article 9

>Original text>

The initial deposit will, as a rule, be converted into a fine if within the two subsequent years the excessive deficit has, in the view of the Council, not been corrected. The Council may decide to supplement this fine by the measures foreseen in the first and second indents of Article 104c(11) if the latter had not been applied at the moment of imposing sanctions. At the same time the Member State should be required to make a new non-interest-bearing deposit calculated according to the rule set out in Article 8 of this Regulation.

>Text following EP vote>

The initial deposit will, as a rule, be converted into a fine if within the two subsequent years the excessive deficit has, in the view of the Council, not been corrected. At the same time the Member State could be required to make a new non-interest-bearing deposit calculated according to the rule set out in Article 8 of this Regulation.

(Amendment 56)

Article 12

>Original text>

Deposits as specified in Article 8 of this Regulation shall be lodged with the Commission. Interest on the deposits, and fines specified in Article 9 of this Regulation constitute resources of the general budget of the European Communities.

>Text following EP vote>

Deposits as specified in Articles 7, 8 and 9 of this Regulation shall be lodged with the Commission. The Commission shall keep a separate account for this purpose. Interest on the deposits, and fines specified in Article 9 of this Regulation constitute resources of the general budget of the European Communities and they shall be entered in the budget for the financial year which follows the year of their entry in the accounts. Interest on the deposits shall be calculated on the basis of the interest rate applied on the money market of the Member State concerned to short-term (6-month) financing.

(Amendment 75)

Article 12a (new)

>Text following EP vote>

Article 12a

The Council shall periodically review, on the basis of a report by the Commission and opinions by the ECB and by the Committee provided for in Article 109c and after consulting the European Parliament, the modalities and provisions of this Regulation in the light of experience, the relevant Council Decisions (...) and any amendments to the Treaty resulting from the 1996 intergovernmental conference. The first review shall take place before 1 January 2001.

Legislative resolution embodying Parliament's opinion on the proposal for a Council Regulation on speeding up and clarifying the implementation of the excessive deficit procedure (COM(96)0496 - C4-0577/96 - 96/0248 (CNS))

(Consultation procedure)

The European Parliament,

- having regard to the Commission proposal to the Council, COM(96)0496 - 96/0248(CNS),

- having been consulted by the Council pursuant to Article 104c(14) of the EC Treaty (C4-0577/96),

- having regard to Rule 58 of its Rules of Procedure,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinion of the Committee on Budgets (A4- 0371/96),

1. Approves the Commission proposal, subject to Parliament's amendments;

2. Calls on the Commission to alter its proposal accordingly, pursuant to Article 189a(2) of the EC Treaty

3. Calls on the Council to notify Parliament should it intend to depart from the text approved by Parliament;

4. Calls for the conciliation procedure to be opened should the Council intend to depart from the text approved by Parliament;

5. Asks to be consulted again should the Council intend to make substantial modifications to the Commission proposal;

6. Instructs its President to forward this opinion to the Council and Commission.