98/313/EC: Council Decision of 1 May 1998 abrogating the Decision on the existence of an excessive deficit for Portugal
Date: 1998-05-01
Institutions: Council of the European Union
Subjects: Portugal, budget deficit, gross domestic product, public debt

L 139/18

EN

Official Journal of the European Communities

11. 5. 98

COUNCIL DECISION

of 1 May 1998

abrogating the Decision on the existence of an excessive deficit for Portugal

(98/313/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 104c(12) thereof,

Having regard to the recommendation from the Commis-
sion,

in 1997,

Since 1993, the government deficit has been declining
significantly and,
it reached 2,5 % of GDP,
which is below the Treaty reference value; a further reduc-
tion to 2,2 % of GDP is forecast for 1998. According to
the 1997 convergence programme for Portugal, the deficit
is projected to decline to 1,5 % of GDP in 2000.

Whereas the second stage for achieving economic and
monetary union started on 1 January 1994; whereas
Article 109e(4) of the Treaty lays down that, in the second
stage, Member States shall endeavour to avoid excessive
government deficits;

The government debt ratio peaked at 65,9 % of GDP in
1995 and has since then declined each year to 62,0 % in
1997. The government debt ratio is forecast to equal
60,0 % of GDP in 1998 and is expected then to fall
below the reference value.

Whereas there is an excessive deficit procedure which
provides for a decision on the existence of an excessive
deficit and, after the excessive deficit has been corrected,
for the abrogation of that decision; whereas, during the
second stage, the excessive deficit procedure is deter-
mined by Article 104c of the Treaty, excluding para-
graphs 1, 9 and 11; whereas the Protocol on the excessive
deficit procedure annexed to the Treaty sets out further
provisions relating to the implementation of the excessive
deficit procedure; whereas Regulation (EC) No 3605/93 (1)
lays down detailed rules and definitions for the applica-
tion of the said Protocol;

Whereas, following a recommendation from the Commis-
sion in accordance with Article 104c(6) of the Treaty, the
Council decided on 26 September 1994 that an excessive
deficit existed in Portugal; whereas, in accordance with
Article 104c(7), the Council made recommendations to
Portugal with a view to bringing the excessive deficit
situation to an end (2);

Whereas a Council Decision on the existence of an exces-
sive deficit is to be abrogated, in accordance with the
provisions of Article 104c(12) of the Treaty, to the extent
that the excessive deficit in the Member State concerned
has, in the view of the Council, been corrected;

Whereas, when abrogating the Decision, the Council is to
act on a recommendation from the Commission; whereas,
based on the data provided by the Commission after
reporting by Portugal before 1 March 1998 in accordance
with Regulation (EC) No 3605/93, the following conclu-
sions are warranted:

The deficit was below the Treaty reference value in 1997
and is expected to remain so in 1998 and to decline
further in the medium term; the debt ratio has been
declining in the last two years and is expected soon to fall
below the reference value,

HAS ADOPTED THIS DECISION:

Article 1

From an overall assessment it follows that the excessive
deficit situation in Portugal has been corrected.

Article 2

The Council Decision of 26 September 1994 on the
existence of an excessive deficit in Portugal is hereby
abrogated.

Article 3

This Decision is addressed to the Portuguese Republic.

Done at Brussels, 1 May 1998.

For the Council

The President

G. BROWN

(1) OJ L 332, 31. 12. 1993, p. 7.
(2) Council recommendations of 7 November 1994, 24 July 1995,

16 September 1996 and 15 September 1997.