WRITTEN QUESTION E-3150/02 by Ilda Figueiredo (GUE/NGL) to the Commission. Application of the Stability Pact.
Date: 2002-11-04
Institutions: European Parliament, Provisional data
Subjects: European Commissioner, Portugal, budget deficit, multilateral surveillance, public statement, stability pact

3.4.2004

EN

Official Journal of the European Union

C 84 E/705

WRITTEN QUESTIONS WITH ANSWER
(Part 4)

(2004/C 84 E/0791)

WRITTEN QUESTION E-3150/02

by Ilda Figueiredo (GUE/NGL) to the Commission

(4 November 2002)

Subject: Application of the Stability Pact

Commissioner Solbes Mira recently confirmed what had been common knowledge for some time, namely
that the aims of the stability programmes would not be achieved in 2002. This is the case in Germany,
France and Italy, and it is quite clear that Germany’s public deficit will be above the 3 % threshold in 2002
(as admitted by the German Minister of Finance). The truth is now out. The Commission proposal, while
reasserting the basic principles, highlights the predominantly political nature of the Stability Pact’s aims
and its limitations, especially in times of economic recession or slowdown. The Pact has served as a pretext
for a policy of privatisation in areas which undermine public services and fundamental rights, such as
public health, education, public investment and the proper and fait implementation of the Structural
Funds. It is absurd to try to apply a single budgetary policy, which fails to take into account development
level disparities within the euro zone despite the fact that these require a differentiated response in each
Member State.

It is, to say the least, comical that, at a time when a proceedings are being instituted against Portugal
owing to its excessive deficit, and a direct recommendation is being made for anti-social and deflationary
policies to be applied, Commissioner Pascal Lamy should state in an interview with the Italian newspaper
‘Il sole 24 Ore’ that the 3 % rule is, in his view, ‘medieval’ and that ‘the Pact is an unrefined instrument of
economic governance’. The President of the European Commission, Romano Prodi, has, for his part, in an
interview with ‘Le Monde’, acknowledged the Pact’s deficiencies and the need to make it more flexible,
describing it as a ‘stupid’ and ‘rigid’ instrument. Prime Minister Jean-Pierre Raffarin has stated that the only
restriction is the 3 % figure and that he would therefore not attempt to achieve the objectives of the
stability programmes but would instead endeavour to keep his electoral promises by lowering taxes and
increasing state subsidies. Even Chancellor Schroeder, who had asked for the Pact to be established as a
condition for accepting EMU, has suggested that there is no need for a dogmatic approach to the rules that
have been laid down.

In this context, will the Commission answer the following questions:

(cid:1) what is the purpose of maintaining the Stability Pact at present? Why does the Commission not decide
instead to suspend the Pact immediately and to open a wide-ranging debate on the current broad lines
of economic and monetary policy, with a view to promoting the growth of a labour market that
shows due respect for workers and the fight against poverty and social exclusion?

(cid:1) does it not consider that,

in view of all the public statements made by leading members of the
Commission, it should immediately suspend the procedings instituted against Portugal owing to its
excessive deficit?

Answer given by Mr Solbes Mira on behalf of the Commission

(10 December 2002)

The main purpose of the Stability and Growth Pact (SGP) is to ensure sound budgetary policies thus
avoiding excessive deficits. Achieving the SGP target of ‘close to balance or in surplus’ will ensure that
budget positions remain on a sustainable path while the automatic stabilisers are allowed to play freely
over the cycle helping to support growth in bad times without breaching 3 %. Sound public finances also
provide the budgetary room necessary for structural reform in support of growth and employment. The
SGP has worked successfully in that it has contributed to ensure a growth-friendly policy mix.

C 84 E/706

Official Journal of the European Union

EN

3.4.2004

However, it must also be acknowledged that looking at individual Member States, some are now close to,
or have even surpassed, the 3 % of gross domestic product (GDP) deficit reference value and have not yet
achieved the ‘close to balance or in surplus’ goal of the SGP. The Council has addressed a recommendation
to Portugal under the excessive deficit procedure (EDP) and the Commission has launched the EDP for
Germany. The Commission has also recommended to the Council to issue an early warning to France. This
indicates that the rule based fiscal policy framework (EDP + SGP) operates as intended.

Achieving and maintaining a close to balance budgetary position creates the necessary room for the
automatic stabilisers to play fully, it also provides room to cope with the possible budgetary impact of
reforms aiming at enhancing growth and employment.

Overall, it is the opinion of the Commission that the design of the budgetary rule based framework is
appropriate but that efforts can be made to improve its implementation. The Commission will come
forward with a Communication before the end of 2002 on this issue.

(2004/C 84 E/0792)

WRITTEN QUESTION P-3201/02

by María Sornosa Martínez (PSE) to the Commission

(4 November 2002)

Subject: Spanish National Hydrological Plan: Júcar-Vinalopó interbasin diversion

The decision to divert water from the Júcar basin to the Vinalopó basin in the Alicantí-Marína Baja area
(Alicante) was adopted on 29 August 1998 and now forms part of Annex 2 to the Spanish National
Hydrological Plan. Under this project, 80 hm3 of water would be diverted each year, with 55 hm3 being
used for crop irrigation to achieve the official objective of aquifer regeneration. The water would be
diverted between different basins within the same administrative area.

According to local environmental experts, the project proposal overestimates the actual volume of water
that the Júcar can provide, which is a sign either of ignorance of the river’s hydrology or of incorrect data.
It fails to take into account the hydrological records for 1994-1995, which showed a diversion to be
impossible, especially if the flow rate decreases in line with climate change forecasts.

The experts consider the environmental impact study on the diversion to be inaccurate and incomplete.
The study does not cover the economic impact on irrigated areas or on the fertile Júcar plain. Neither does
it mention the Roman and Bronze Age remains that will be put in jeopardy. Only part of this study was
made public, in contravention of Directive 90/313/EEC (1) on freedom of access to information on the
environment.

If the Commission is considering a request for cofinancing for this project, could it indicate whether it has
received a report from the Spanish Government on the way that the project will affect the Natura 2000
network? Is the Commission aware that the project affects at least six sites of Community importance in
the Autonomous Community of Valencia? Does the Commission consider these effects to be compatible
with possible European financing of this project?

(1) OJ L 158, 23.6.1990, p. 56.

Answer given by Mrs Wallström on behalf of the Commission

(11 December 2002)

The decision to divert water from the Júcar basin to the Vinalopó basin in the Autonomous Community of
Valencia in Spain has been the subject of several written questions from the Honourable Member.

In its answers to these written questions, the Commission has had the opportunity to inform the
Honourable Member of the steps which it has taken as part of an investigation of a complaint received
about this project and its possible impact on the environment.