Council opinion of 27 November 2000 on the updated stability programme of Germany for the period 2000-2004
Date: 2000-11-27
Institutions: Council of the European Union
Subjects: Community budget, Germany, coordination of EMU policies, economic convergence, economic policy, multilateral surveillance

28.12.2000

EN

Official Journal of the European Communities

C 374/3

(15) EMPHASISES the need to differentiate the means of
implementing Community
research framework pro-
grammes according to the nature of the activities and
the priorities, while complying with the principle of the
selection of projects on the basis of competitive public
calls
evaluation rules;
SUPPORTS the need for more efficient management, and
the Commission’s determination to refocus on its essential
tasks.

tender with transparent

for

(16) TO THAT END, THE COUNCIL INVITES THE COMMISSION:

(cid:151) to send the Council

soon as possible

its
as
contributions on the next stages in furtherance of
formal
the implementation of
proposal
sixth framework
programme during the first quarter of 2001, so that
those Decisions may be taken well before the end of

for Decisions on the

the ERA and its

the fifth framework programme (2002), and preferably
by the end of the first half of 2002,

(cid:151) to give details of new management methods in its
including as regards the possible

formal proposal,
outsourcing of certain tasks,

the

JRC’s mission,

(cid:151) to submit to the Council as soon as possible, so that it
can hold an in-depth discussion before the framework
programme is adopted, a communication on the
covering
implementation of
management
the
focusing of research efforts, the matching of human
resources to the task, the improvement of links with
other national research institutes, and the response
which the JRC might provide to the needs of users,
particularly the Commission’s Directorates-General,
and public authorities.

styles, methods and governance,

COUNCIL OPINION

of 27 November 2000

on the updated stability programme of Germany for the period 2000-2004

(2000/C 374/02)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to 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 (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

After consulting the Economic and Financial Committee,

HAS DELIVERED THIS OPINION:

On 27 November 2000 the Council examined Germany’s
updated stability programme, which covers
the period
2000-2004. The Council welcomes the fact that this update
makes distinct progress in terms of compliance with the code
of conduct.

The Council notes with satisfaction that the budgetary target
for the current year is maintained in spite of a slightly worse

than expected outcome in 1999. However, the Council notes
that this is due also to higher than projected tax revenues. The
fact that the projected consolidation path depends heavily on
levels of government other
the budgetary developments of
than the federal one shows the importance of an improved
cooperation on government finances at the national
level as
already emphasised in the Council opinion of 28 February
2000 on the updated stability programme of Germany for
the period 1999 to 2003 (2).

The Council considers the macroeconomic scenario presented
in the programme, which assumes average annual output
growth of around 2,5 % between 2001 and 2004,
to be
realistic. However, the Council recommends that, with a view
to external shocks,
to making the economy more resilient
reforms be implemented which render
the labour market
more flexible. Furthermore, benefiting from the favourable
development of employment, the government should adhere
to its announced policy of a further clear reduction of social
security contribution rates. The Council notes
the
underlying growth scenario presupposes that wage moderation
will prevail throughout the programme period. A moderate
outcome of the wage negotiation round for the year 2002
will be crucial in this respect.

that

(1) OJ L 209, 2.8.1997, p. 1.

(2) OJ C 98, 6.4.2000, p. 1.

C 374/4

EN

Official Journal of the European Communities

28.12.2000

a

foresees

updated

balanced

programme

general
The
government budget by 2004, while the gross debt ratio is
expected to decrease to 54,5 % of GDP by the end of the
programme period. The Council considers it appropriate that
the budgetary consolidation envisaged in the programme is
achieved by a decrease in the expenditure ratio which is only
partially offset by a decline in the revenue ratio. The Council
recognises that the ongoing expenditure restraint has created
some room for the planned tax reforms in the year 2001, while
also recognising that in this year the decline in the revenue
ratio will be higher than the decline in the expenditure ratio.
However, with these reforms leading to a clear deterioration in
the actual deficit in 2001 and in the structural deficit in years
recommendation to
2001/2002,
reiterates
to
the reforms with greatest caution so as not
implement
provoke a lasting deterioration in the structural deficit.
In
this context,
it is important that expenditure is kept under
strict control.

the Council

its

The Council considers that the objective for the medium-term
budgetary position, set for 2002 and subsequent years, will be
in conformity with the Stability and Growth Pact.

Moreover, the Council considers that the programme is broadly
the broad economic
in line with the recommendations of
policy guidelines. The Council recommends, however,
that,
should tax revenues be higher than expected, they be used to

reduce the deficit below the targeted level with a view to
widening the safety margin in line with the broad economic
policy guidelines. Thereby it should be ensured that no further
pro-cyclical stimulus is provided to the economy which in turn
might pose a threat to price stability.

Regarding government debt, the Council welcomes the fact
that, owing to the improved position of government finances,
the trend of a rising debt ratio has been broken. In view of the
the
foreseeable challenges associated with the ageing of
German population, continued privatisation efforts at all
levels of government would help achieve the programme’s
medium-term debt objectives.
the Council
welcomes the fact that the government will use all of the
UMTS proceeds to reduce debt. While welcoming the federal
government’s plans to use part of the resulting interest savings
to increase investment spending, the Council considers that, in
light of the non-negligible risks to the budgetary projections, it
would be appropriate not to spend all of the resulting interest
savings.

In this context,

The Council welcomes the fact that the tax reforms are inserted
in a medium-term oriented comprehensive economic reform
the pension system and of
strategy. Continued reforms of
improve the
labour and product markets could further
potential growth path not only of Germany, but of
the
euro-zone as a whole.

COUNCIL OPINION

of 27 November 2000

on the updated stability programme of Finland for the period 2000-2004

(2000/C 374/03)

THE COUNCIL OF THE EUROPEAN UNION,

After consulting the Economic and Financial Committee,

Having regard to the Treaty establishing the European
Community,

HAS DELIVERED THIS OPINION:

Having regard to 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 (1), and in particular Article 5(3) thereof,

Having regard to the recommendation of the Commission,

(1) OJ L 209, 2.8.1997, p. 1.

On 27 November 2000 the Council examined Finland’s
the period
updated stability programme, which covers
2000-2004. The Council notes with satisfaction that
the
Finnish general government surplus, registered since 1998,
increased in 1999, and is projected to exceed 4 % of GDP
throughout
general
the period 2000-2004, while
government debt to GDP ratio is projected to continue to
decline. Moreover,
the updated
programme is consistent with the broad economic policy
guidelines.

the Council considers that

the