2000/33/EC: Council Decision of 17 December 1999 abrogating the Decision on the existence of an excessive deficit in Greece
Date: 1999-12-17
Institutions: Council of the European Union
Subjects: Greece, budget deficit, budget policy, gross domestic product, public debt, public finance

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Official Journal of the European Communities

18. 1. 2000

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 17 December 1999

abrogating the Decision on the existence of an excessive deficit in Greece

(2000/33/EC)

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the recommendation from the Commission,

Whereas:

(1)

(2)

Article 104(1) of the Treaty lays down that Member
States shall avoid excessive government deficits;

Article 104 of the Treaty defines an excessive deficit
procedure providing for a Decision on the existence of
an excessive deficit and, after the excessive deficit has
been corrected, for the abrogation of that Decision; the
excessive deficit procedure is determined by Article 104
of the Treaty; the Protocol on the excessive deficit proce-
dure annexed to the Treaty sets out further provisions
relating to the implementation of the excessive deficit
procedure; Regulation (EC) No 3605/93 (1) lays down
detailed rules and definitions for the application of the
provisions of the said Protocol; the Stability and Growth
Pact, consisting of European Council Resolution of
Amsterdam of 17 June 1999 (2) and Regulations (EC)
Nos 1466/97 (3) and 1467/1999 (4),
lays down the
guiding principles and provides rules and clarifications
for the implementation of the excessive deficit proce-
dure, the surveillance of budgetary positions and the
surveillance and coordination of economic policies in
stage three of EMU;

(3)

following a recommendation from the Commission in
accordance with Article 104(6) of the Treaty the Council
decided on 26 September 1994 that an excessive deficit
existed in Greece; in accordance with Article 104(7) of
to
the Treaty the Council made recommendations

(1) OJ L 332, 31.12.1993, p. 7.
(2) OJ C 236, 2.8.1997, p. 1.
(3) OJ L 209, 2.8.1997, p. 1.
(4) OJ L 209, 2.8.1997, p. 6.

(4)

(5)

Greece on 7 November 1994, 24 July 1995, 16
September 1996, 15 September 1997 and 29 May 1998
with a view to bringing the excessive situation to an end;

a Council Decision on the existence of an excessive
deficit is to be abrogated,
in accordance with Article
104( 12) of the Treaty, when the excessive deficit in the
Member State concerned has, in the view of the Council,
been corrected;

when abrogating the Decision, the Council shall act on a
recommendation from the Commission; the definitions
of ‘government’, ‘deficit’ and ‘investment’ are laid down
in the Protocol on the excessive deficit procedure by
reference to the European system of integrated economic
accounts (ESA), second edition; based on the data
provided by the Commission after reporting by Greece
in September 1999 in accordance with Regulation (EC)
No 3605/93, the following conclusions are warranted.

The general government deficit was reduced to 2,5 % of
GDP in 1998 from 4,0 % in 1997 and 13,8 % in 1993.
The outcome for 1998 was slightly above the 2,4 %
deficit target recommended by the Council for that year.
Government investment expenditure, at 3,7 % of GDP in
1998, exceeded the government deficit for the first time.
Fiscal adjustment in recent years was based on large and
increasing primary surpluses while the interest burden
declined progressively under the combined effect of
lower interest rates and of the reduction in the govern-
ment debt to GDP ratio. The deficit in 1999 is estimated
at 1,9 % of GDP. According to the 1998 update of the
Greek convergence programme submitted under the
Stability and Growth Pact requirements,
the general
government deficit
is expected to decline further to
0,8 % of GDP in 2001.

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Official Journal of the European Communities

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The general government debt reached a peak of 112,3 %
of GDP in 1996; it was reduced by 6 percentage points
in the following two years, to 106,3 % of GDP in 1998.
The debt ratio is estimated at 104,5 % of GDP in 1999.
According to the 1998 update of the Greek convergence
programme, the debt ratio may decline to below 100 %
of GDP in 2001. The Greek Government has confirmed
its commitment to keeping the primary surplus at a level
that contributes strongly to the decline of the debt ratio.
This primary surplus is essential to maintaining the debt
ratio on its sustainable downward path.

HAS ADOPTED THIS DECISION:

Article 1

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

Article 2

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

This Decision is addressed to the Hellenic Republic.

Done at Brussels, 17 December 1999.

The deficit was below the Treaty reference value in 1998
and is expected to remain so in 1999 and to decline
further in the medium term; the gross debt ratio is
currently decreasing and is expected to be on a declining
path in the coming years,

For the Council

The President

K. HEMILÄ