98/315/EC: Council Decision of 1 May 1998 abrogating the Decision on the existence of an excessive deficit for the United Kingdom
Date: 1998-05-01
Institutions: Council of the European Union
Subjects: United Kingdom, budget deficit, gross domestic product, public debt

L 139/20

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 the United
Kingdom

(98/315/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,

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;

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 the United Kingdom; whereas,
in
accordance with Article 104c(7),
the Council made
recommendations to the United Kingdom 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 the United Kingdom before 1 March 1998 in
accordance with Regulation (EC) No 3605/93,
the
following conclusions are warranted:

(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.

The government deficit in the United Kingdom has been
declining significantly since 1993 and reached 1,9 % of
GDP in 1997, which is well below the Treaty reference
value. A further decline in the deficit to 0,6 % of GDP is
forecast for 1998. According to the 1997 convergence
programme for the United Kingdom, the government
accounts are projected to show a surplus by the end of the
decade.

The government debt ratio has never been above the
60 % of GDP Treaty reference value; after having
increased for several years, it fell to 53,4 % of GDP in
1997.

The deficit was well below the Treaty reference value in
1997 and is expected to remain so in 1998 and to turn
into a surplus in the medium term; the government debt
ratio remains below the Treaty reference value,

HAS ADOPTED THIS DECISION:

Article 1

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

Article 2

The Council Decision of 26 September 1994 on the exis-
tence of an excessive deficit in the United Kingdom is
hereby abrogated.

Article 3

This Decision is addressed to the United Kingdom of
Great Britain and Northern Ireland.

Done at Brussels, 1 May 1998.

For the Council

The President

G. BROWN