Recommendation for a

COUNCIL DECISION

abrogating Decision 2010/289/EU on the existence of an excessive deficit in Slovenia

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 2 December 2009, following a recommendation from the Commission, the Council decided, by Decision 2010/289/EU, in accordance with Article 126(6) of the Treaty, that an excessive deficit existed in Slovenia. The Council noted that the general government deficit planned for 2009 was 5.9% thus above the 3% of GDP Treaty reference value. The general government gross debt was planned to reach 34.2% of GDP in 2009, thus below the 60%-of-GDP Treaty reference value.

(2)On the same date, in accordance with Article 126(7) of the Treaty and Article 3(4) of Council Regulation (EC) No 1467/97, the Council, based on a recommendation from the Commission, addressed a recommendation to Slovenia with a view to bringing the excessive deficit situation to an end by 2013 at the latest. That Council recommendation was made public.

(3)On 21 June 2013, the Council considered that Slovenia had taken effective action in compliance with Council Recommendation of 2 December 2009 under Article 126(7) of the Treaty, but that unexpected adverse economic events with major unfavourable consequences for government finances had occurred after the adoption of the original recommendation. Therefore, the Council, following a recommendation from the Commission, considered that the conditions envisaged in Article 3(5) of Regulation (EC) No 1467/97 were fulfilled and issued a new recommendation to Slovenia under Article 126(7) of the Treaty, with a view to bringing the excessive deficit situation to an end by 2015. That new Council recommendation was made public.

(4)On 5 March 2014, in accordance with Article 11(2) of Regulation (EU) No 473/2013, in view of the risks to the achievement of a durable correction of the excessive deficit by 2015, the Commission addressed a recommendation to Slovenia, with a view to taking the necessary action to ensure full compliance with the Council recommendation of 21 June 2013, notably by meeting the fiscal effort recommended by the Council.

(5)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 this Protocol, Member States are to notify data on government deficits and debt and other associated variables twice a year, namely before 1 April and before 1 October, in accordance with Article 3 of Council Regulation (EC) No 479/2009.

(6)The Council should take a decision to abrogate a decision on the existence of an excessive deficit 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 threshold over the forecast horizon.

(7)Based on data provided by the Commission (Eurostat) in accordance with Article 14 of Regulation (EC) No 479/2009, following the April 2016 notification by Slovenia, the 2016 Stability Programme and the Commission 2016 spring forecast, the following conclusions are warranted:

–After peaking at 15.0% of GDP in 2013, the general government deficit was reduced to 5.0% of GDP in 2014 and reached 2.9% of GDP in 2015. The deficit reduction in 2015 was mainly driven by the non-recurrence of one-offs that affected the deficit in 2014 (1.1% of GDP) and a significant increase in current revenues (by 1.4% of GDP) which more than offset the increase in current expenditure (by 0.2% of GDP) and gross fixed capital expenditure (by 0.2% of GDP) that is explained by a higher absorption rate of EU funds.

–The stability programme for 2016-19, submitted by the Slovenian government on 28 April 2016, plans the general government deficit to decline to 2.2% of GDP in 2016 and to 1.6% of GDP in 2016. The Commission 2016 spring forecast projects a deficit of 2.4% of GDP in 2016 and 2.1% of GDP in 2017. Thus, the deficit is set to remain below the Treaty reference value of 3% of GDP 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, deteriorated by 0.7% of GDP over the period 2013-2015.