WRITTEN QUESTION No. 1318/98 by José GARCÍA-MARGALLO Y MARFIL to the Commission. EURO 1999
Date: 1998-04-29
Institutions: European Parliament, Provisional data
Subjects: Economic and Monetary Union, Luxembourg, budget policy, budgetary discipline (EU), economic convergence, euro, profit, third stage of EMU

19. 11. 98

EN

Official Journal of the European Communities

C 354/91

(98/C 354/145)

WRITTEN QUESTION E-1317/98

by Jose· Garc(cid:14)·a-Margallo y Marfil (PPE) to the Commission

(29 April 1998)

Subject: EURO 1999

As a result of the Pact for Stability and Growth adopted by the Amsterdam European Council in June 1997, the
Member States(cid:146) medium-term budgetary objective will be to achieve (cid:145)positions close to balance or in surplus(cid:146).
If the Member States continue their budgetary adjustments in subsequent years, their public finances will be in
the best position to tackle the budgetary consequences of a possible downturn in the economy.

But what does the Commission think would be the current situation in Italy if the Stability Pact had been applied
during the period 1992-1997?

Answer given by Mr de Silguy on behalf of the Commission

(2 June 1998)

The stability and growth pact is constituted by a resolution of the European Council of 7 June 1997 (1) and by
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 (2),  and  Council  Regulation  (EC)
No 1467/97  of  7  July  1997  on  speeding-up  and  clarifying  the  implementation  of  the  excessive  deficit
procedure (2). The pact aims at fiscal discipline in the economic and monetary union (EMU) thus creating the
appropriate stability conditions for sustained growth. It provides a powerful system of incentives for a Member
State not to incur an excessive deficit and to correct it rapidly if such a situation should occur.

In 1992, Italy had a general government deficit of 9.7% of gross domestic product (GDP), and in 1993 the deficit
was 9.5% of GDP. This situation led to a Council decision on 26 September 1994 on the existence of an excessive
deficit in Italy (Article 104c (6) of the EC Treaty). In the period covered by the Honourable Member(cid:146)s question,
i.e. 1992 to 1997, Italy budgetary policy was mainly geared towards convergence, i.e. to correct the excessive
deficit situation and thus to meet the convergence criteria on the budgetary position. Moreover, paragraphs 9 and
11 of Article 104c of the EC Treaty, which deal with sanctions, did not apply during stage two of EMU.

(1)  OJ C 236, 2.8.1997.
(2)  OJ L 209, 2.8.1997.

(98/C 354/146)

WRITTEN QUESTION E-1318/98

by Jose· Garc(cid:14)·a-Margallo y Marfil (PPE) to the Commission

(29 April 1998)

Subject: EURO 1999

As a result of the Pact for Stability and Growth adopted by the Amsterdam European Council in June 1997, the
Member States(cid:146) medium-term budgetary objective will be to achieve (cid:145)positions close to balance or in surplus(cid:146).
If the Member States continue their budgetary adjustments in subsequent years, their public finances will be in
the best position to tackle the budgetary consequences of a possible downturn in the economy.

But what does the Commission think would be the current situation in Luxembourg if the Stability Pact had been
applied during the period 1992-1997?