A4-0371/96

Proposal for a Council Regulation on the strengthening of the surveillance and coordination of budgetary positions (COM(96)0496 - C4-0576/96 - 96/0247(SYN))

The proposal was approved with the following amendments:

(Amendment 1)

Recital -1 (new)

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(-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 58)

Recital -1a (new)

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(-1a) Whereas a high level of unemployment is one of the causes of instability in the economy;

(Amendment 59)

Recital 1

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(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;

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(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 monetary stability;

(Amendment 4)

Recital 2a (new)

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

(Amendment 61)

Recital 2b (new)

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(2b) Whereas there is a need for coordination of national and Community budgetary policies, which will take account of their impact on the level of demand and supply in the European economy and in the Member States concerned;

(Amendment 8)

Recitals 3a to 3c (new)

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(3a) Whereas Article 104c(3) of the Treaty requires the Commission's report on a potential 'excessive deficit¨ to take into account all relevant factors, including the medium-term economic and budgetary position of the Member State;

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(3b) Whereas Article 103(4) and (5) is the means provided by the Treaty for making such an assessment;

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(3c) Whereas assessment of the economic position must take account of the full range of economic objectives laid down in Article 2 of the Treaty;

(Amendment 62)

Recital 4

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(4) Whereas the reference value for the government deficit of 3% of GDP specified in Article 1 of Protocol No 5 on the excessive deficit procedure is to be seen as a ceiling in normal circumstances; whereas, therefore, government budgets in the medium term should aim for positions close to balance or in surplus, taking due account of differences in national characteristics;

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(4) Whereas, in the context of Article 104c, the reference value for the government deficit of 3% of GDP specified in Article 1 of Protocol No 5 on the excessive deficit procedure is to be seen as a ceiling in normal circumstances; whereas, therefore, over the economic cycle government budgets in the medium term should aim for positions close to balance or in surplus, taking due account of differences in national characteristics;

(Amendment 63)

Recital 5)

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(5) Whereas the multilateral surveillance procedure of Article 103(3 and 4) should be developed to provide an early warning system, in which the Council would alert a Member State to the need to take corrective action to prevent a government deficit becoming excessive; whereas this multilateral surveillance procedure should continue to monitor the full range of economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in Article 103(2);

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(5) Whereas the multilateral surveillance procedure of Article 103(3 and 4) should be developed to provide an early warning system, in which the Council would alert a Member State to the need to take corrective action to prevent a government deficit becoming excessive; whereas this multilateral surveillance procedure should continue to monitor the full range of economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in Article 103(2); whereas the aspects of multilateral surveillance specified in Articles 102a and 103 of the Treaty, which are not covered by this Regulation, as well as the Employment and Labour Market Committee to be established by Council Decision [...], will be considered in the first review of this Regulation;

(Amendment 10)

Recital 5a (new)

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(5a) Whereas the multilateral surveillance procedure of Article 103 (3) and (4) of the Treaty should also be developed to provide early warning of failure to achieve progress in respect of the wider economic objectives of the Community, as defined in Article 2 of the Treaty;

(Amendment 11)

Recital 9a (new)

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(9a) Whereas, when Article 103a stipulates that the Council may, on a proposal from the Commission, grant, under certain conditions, Community financial assistance to the Member State concerned, it is necessary that also the conditions laid down by this Article are fulfilled;

(Amendment 64)

Recital 10a (new)

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(10a) Whereas stability programmes should be incorporated in national budgetary procedures and submitted within an appropriate timetable to national parliaments in the framework of the provisions set out in this Regulation;

(Amendment 13)

Recital 11

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(11) Whereas there is a need to define rules for the examination of stability programmes by the Council;

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(11) Whereas there is a need to define rules for the examination of stability programmes by the Council; whereas such rules should define the role of each institution of the European Community;

(Amendment 65)

Recital 12

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(12) Whereas the monitoring of stability programmes should be carried out in the framework of the multilateral surveillance; whereas particular attention should be given to slippage from the programme targets for the government surplus/deficit; whereas in order to prevent a serious deterioration in the deficit position of a Member State without a derogation it would be appropriate for the Council to recommend that the Member State take corrective action; whereas in the event of persistent budgetary slippage the Council should consider it appropriate to reinforce and make public its recommendation;

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(12) Whereas the monitoring of stability programmes should be carried out in the framework of the multilateral surveillance; whereas particular attention should be given to slippage from the programme targets for the government surplus/deficit and to sustainable and non-inflationary growth; whereas in order to prevent a serious deterioration in the position of a Member State without a derogation it would be appropriate for the Council to recommend that the Member State take corrective action; whereas in the event of persistent slippage the Council should consider it appropriate to reinforce and make public its recommendation;

(Amendment 15)

Recital 13

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(13) Whereas it will also be necessary to make similar rules covering the programmes and surveillance of the other Member States;

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(13) Whereas it will also be necessary jointly to make similar rules covering the programmes and surveillance of the other Member States which would temporarily not be members of EMU;

(Amendment 16)

Recital 13a (new)

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(13a) Whereas the circumstances which during stage II of EMU justified the establishment of a Cohesion Fund for certain countries to ensure that the convergence programmes did not have an adverse effect on public investment may persist during stage III with regard to stability objectives;

(Amendment 17)

Recital 13b (new)

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(13b) Whereas Council Regulation (EC) No 1164/941 establishing a Cohesion Fund specifically provides for the fund to continue to be applied after 1999;

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1 OJ L 130, 25.5.1994, p. 1.

(Amendment 18)

Article -1 (new)

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Article -1

This Regulation sets out the rules governing stability programmes upon which multilateral surveillance shall be undertaken by the Council so as to prevent at an early stage the occurrence of excessive government deficits and to ensure effective coordination of all policies concerned.

(Amendment 66)

Article 1(2)(a)

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(a) Medium-term objective and adjustment path for the government surplus/deficit as a ratio to GDP; expected path for the government debt ratio,

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(a) Medium-term objective and adjustment path for the government surplus/deficit and for government investment expenditure as a ratio to GDP; expected path for the government debt ratio,

(Amendment 67)

Article 1(2)(b)

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(b) Main assumptions about expected economic developments such as real GDP growth, employment/unemployment, inflation, and other important economic variables,

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(b) Main assumptions about expected economic developments such as real GDP growth, creation of employment, level of employment/unemployment, inflation, government investment expenditure as a ratio to GDP, government primary surplus and other important economic variables, such as integration of financial and credit markets, situation and development of balance of payments, flow of capital, level of saving and regional indicators,

(Amendment 21)

Article 1(2)(c)

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(c) Description of budgetary measures being taken to achieve the objectives of the programme,

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(c) Description of budgetary measures being taken to achieve the objectives of the programme and an assessment of their quantitative effects,

(Amendment 22)

Article 1a (new)

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Article 1a

Cohesion Fund

1. The Cohesion Fund intended to assist certain countries during stage II with a view to facilitating the convergence process shall be maintained in operation during stage III, for as long as the parameters for development differentials which justified its creation (per capita GDP lower than 90% of the Community average) remain in force.

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2. The allocation for the Cohesion Fund and the conditions for its application shall be established by means of a Council Regulation.

(Amendment 23)

Article 2(1)

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1. Stability programmes shall be submitted before 1 January 1999. Thereafter, updated programmes shall be submitted each year, not later than two months after the presentation of annual budget proposals by a Member State government to its national parliament. A Member State for which an initial derogation is subsequently abrogated according to Article 109k(2), shall submit a stability programme within six months of the decision on abrogation.

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1. Stability programmes shall, in principle, be submitted before 1 January 1999. Thereafter, updated programmes shall be submitted each year, together with the presentation of annual budget proposals by a Member State government to its national parliament. A Member State for which an initial derogation is subsequently abrogated according to Article 109k(2), shall submit a stability programme within six months of the decision on abrogation.

(Amendment 24)

Article 2(2)

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2. Member States shall make public their stability programmes and updated programmes.

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2. Member States shall submit stability programmes and updated programmes together with the presentation of annual budget proposals to national parliaments for approval and then their stability programmes shall be made public.

(Amendment 68)

Article 3(1)

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1. Based on assessments by the Commission and the Committee provided for in Article 109c, the Council shall examine whether, having regard to specific national characteristics, the medium-term budget objective in the stability programme is close to balance or in surplus, whether the economic assumptions on which the programme is based are realistic and whether the measures being taken and/or proposed are sufficient to achieve the targeted adjustment path towards the medium-term objective.

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1. Based on assessments by the Commission and the Committee provided for in Article 109c the Council shall examine whether, having regard to specific national characteristics, the medium-term budget objective in the stability programme is close to balance or in surplus, whether the government deficit exceeds government investment expenditure, whether the economic assumptions on which the programme is based are realistic and whether the measures being taken and/or proposed are sufficient to achieve the targeted adjustment paths towards the medium-term objectives.

(Amendment 26)

Article 3(2)

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2. The Council shall make the examination of the stability programme referred to in paragraph 1 within at most two months of the submission of the programme. The Council, on a recommendation from the Commission after consulting the Committee provided for in Article 109c, may endorse the stability programme. Where the Council considers that the objectives and contents of a programme should be strengthened, the Council, as provided for by Article 103(4), shall in general make a recommendation to the Member State concerned to adjust its programme.

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2. The Council shall make the examination of the stability programme referred to in paragraph 1 within at most two months of the submission of the programme. The Council, on a recommendation from the Commission after consulting the Committee provided for in Article 109c, may endorse the stability programme. Where the Council considers that the objectives and contents of a programme should be strengthened, the Council shall inform the European Parliament before deciding, as provided for by Article 103(4), to make a recommendation to the Member State concerned to adjust its programme.

(Amendment 69)

Article 4(1)

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1. As part of the multilateral surveillance in accordance with Article 103(3), the Council shall monitor the implementation of stability programmes, based on information provided by Member States and on assessments by the Commission and the Committee provided for in Article 109c, in particular with a view to identifying actual or expected divergence from the medium-term objective (or the adjustment path towards it) set in the stability programme for the government surplus/deficit.

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1. As part of the multilateral surveillance in accordance with Article 103(3), the Council shall monitor the implementation of stability programmes, based on information provided by Member States and on assessments by the Commission and the Committee provided for in Article 109c, in particular with a view to identifying actual or expected divergence from the medium-term objectives (or the adjustment paths towards them) set in the stability programme in the context of Member States' economic cycles. The Commission, after consulting the European Parliament and the Council, shall define the information to be provided by the Member States in order to allow an appraisal of progress in respect of the objectives of Article 2 of the Treaty.

(Amendment 29)

Article 4(2)

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2. In the event of identified divergence from the medium-term objective (or the adjustment path towards it), the Council shall in general, as provided for by Article 103(4), make a recommendation to the Member State concerned to take budgetary adjustment measures.

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2. In the event of identified divergence from the medium-term objective (or the adjustment path towards it), the Council shall, after informing the European Parliament, make a recommendation to the Member State concerned to take budgetary adjustment measures.

(Amendment 30)

Article 4(3)

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3. In the event that in subsequent monitoring the divergence from the medium- term objective (or the adjustment path towards it) is seen to persist or worsen, the Council shall in general make a recommendation to the Member State concerned to take specific corrective action and, as provided for by Article 103(4), may make its recommendation public.

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3. In the event that in subsequent monitoring the divergence from the medium- term objectives (or the adjustment paths towards them) is seen to persist or worsen, the Council shall make a recommendation to the Member State concerned to take specific corrective action and shall inform the European Parliament before deciding, as provided for by Article 103(4), to make its recommendation public.

(Amendment 31)

Article 4(4)

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4. As part of the multilateral surveillance in accordance with Article 103(3), the Council shall also assess the overall actual and forecast budgetary positions for the EMU area as a whole implied by national stability programmes and updated programmes.

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4. As part of the multilateral surveillance in accordance with Article 103(3), the Council shall also assess the overall actual and forecast budgetary positions for the European Union as a whole implied by national stability programmes and updated programmes, and by the convergence programmes to be submitted by the Member States with a derogation according to Council Regulation [...].

(Amendment 32)

Article 4a (new)

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Article 4a

The Council shall decide, in accordance with Article 103a and according to the modalities and procedures provided for in Council Regulation [...], about possible Community financial assistance to the Member State concerned in case of difficulties or a serious threat of severe difficulties caused by exceptional occurrences.

(Amendment 70)

Article 5a (new)

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Article 5a

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, under the procedures specified in Article 189c, the modalities and provisions of this Regulation in the light of experience, of any amendments to the Treaty resulting from the 1996 intergovernmental conference and of the work of the Employment and Labour Market Committee to be established by Council Decision [...]. The first review shall take place before 1 January 2001.

Legislative resolution embodying Parliament's opinion on the proposal for a Council Regulation on the strengthening of the surveillance and coordination of budgetary positions (COM(96)0496 - C4-0576/96 - 96/0247(SYN))

(Cooperation procedure: first reading)

The European Parliament,

- having regard to the Commission proposal to the Council, COM(96)0496 - 96/0247(SYN),

- having been consulted by the Council pursuant to Article 189c and Article 103(5) of the EC Treaty (C4-0576/96),

- 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 incorporate Parliament's amendments in the common position that it adopts in accordance with Article 189c(a) of the EC Treaty;

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.