WRITTEN QUESTION E-2832/03 by Camilo Nogueira Román (Verts/ALE) to the Commission. Compliance with of the Stability and Growth Pact.
Date: 2003-09-23
Institutions: European Parliament, Provisional data
Subjects: EU Member State, Economic and Monetary Union, budget deficit, coordination of EMU policies, public finance, public investment, stability pact

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Official Journal of the European Union

EN

27.3.2004

Does the Commission agree that European hospitals need to have isolation units?

Does the Commission intend to take action in this area?

How many isolation chambers does the Commision believe hospitals in the EU should have available?

Answer given by Mr Byrne on behalf of the Commission

(16 October 2003)

The application of health protection measures, including those undertaken to prevent the spread of Severe
Acute Respiratory Syndrome (SARS) in hospitals, is the responsibility of the authorities of the Member
States.

The Commission has taken, in its areas of competence, a proactive role in responding to SARS and other
viral diseases.

This concerns, in particular, co-ordination of surveillance and technical guidance for responding to SARS
and other communicable diseases in a coherent way throughout the Union. Details of this work can be
found on (http://europa.eu.int/comm/health/index_en.html).

(2004/C 78 E/0458)

WRITTEN QUESTION E-2832/03

by Camilo Nogueira Román (Verts/ALE) to the Commission

(23 September 2003)

Subject: Compliance with of the Stability and Growth Pact

What is the overall situation regarding compliance by the Member States with the Stability and Growth
Pact, given the difficulties experienced by large economies like France and Germany in keeping within the
3 % budget deficit limit? How does the Commission view the fact that some countries are succeeding in
keeping their deficits within these limits by externalising a significant proportion of state investments
through public companies or introducing drastic cuts in welfare spending?

Answer given by Mr Solbes Mira on behalf of the Commission

(12 January 2004)

The deterioration in fiscal positions reflects to some extent the present weak economic situation. Gross
domestic product (GDP) growth has been more subdued than projected in spring and several countries of
the euro area have been in a technical recession. However, an important part of the slippage also derives
from past policy inaction or from deficit increasing measures.

The situation in the three Member States that are in the Excessive Deficit Procedure is of particular
concern. The Council issued recommendations under Article 104(7) of the EC Treaty to Germany, France
and Portugal, setting deadlines for taking corrective action and a deadline for the correction of the
excessive deficit of 2003 for Portugal and 2004 for Germany and France. On the basis of the latest data on
2003 budgetary outcome and budgets for 2004, the Commission will have to assess the situation in

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Portugal. In the second half of this year it has become clear that the action taken by Germany and France
would not be sufficient to correct the excessive deficit by 2004- as required by the respective Council
recommendations of January 2003 and June 2003 (cid:1) although Germany complied with the recom-
mendation for 2003. This was due to a large part to a more prolonged slowdown than expected, but also
to additional measures taken by governments worsening the situation. That has prompted the Commission
to go ahead with the procedures foreseen by the Treaty (Article 104.8 and 104.9) in order to request
France and Germany to take the necessary measures. The Commission has taken the latest developments
carefully into consideration, and come forward with new recommendations which were based on a
balanced view of the actual circumstances. It has therefore recommended to the Council to give an
additional year to Germany and France to correct the deficit, while suggesting a credible consolidation step
in 2004 in order to bring the deficit below 3 % of GDP in 2005. However, the majority required for the
adoption of
the Commission recommendations was not reached in the Ecofin Council meeting of
25 November 2003. After this event, the Council decided to take an unprecedented step by finding an
agreement outside the Treaty. The Commission has clearly expressed its disagreement with the Council, in
particular with the procedure adopted by the Council.

The Commission will continue to apply the Treaty and the Regulations of the Pact. Doing so is the best
guarantee that all member States are treated equally and to ensure sound public finances in all countries.
The Commission will make sure that procedures are applied in a non-partisan fashion and enforced
appropriately.

The interaction between the Union’s budgetary rules and public investment has been investigated in detail
in the report ‘Public Finances in the Economic and Monetary Union (EMU) 2003’, and its conclusions are
reflected in the accompanying Communication from the Commission to the Council and the Parliament (1).
It shows that the decline in public investment rates is a long-run tendency that started already in the
1970s, and affected all
industrial countries and not just Member States. Declining levels of public
including changing boundaries
investment as a share of GDP have been attributed to several factors,
between public and private investment which is in part linked to the process of privatisation. Some of the
decline in public investment appears to be related to efforts to consolidate public finances, which was
necessary irrespective of EMU due to high and increasing debt levels. A careful analysis of the data,
however, fails to show any clear-cut link between change in investment ratio and the provisions of the
Union’s framework for fiscal surveillance. Indeed public investment expenditures in many Member States
have stopped falling after the beginning of monetary union.

Alternative forms of funding traditional investment might be appropriate, from fully private to mixed
forms with the involvement of the public sector. The most known are Public Private Partnerships (PPPs)
that have a sound microeconomic rationale as they can shape incentives in such a way as to achieve cost
efficiency without compromising public objectives relating to the quality and characteristics of the services
provided by the investment. It is important that Member States select projects on the basis of their micro-
economic rationale and not solely on their possible implications for public finances.

The choice regarding the composition of public finances (including both investment and welfare spending)
is in the hands of the Member States.

However, the Union provides guidance through Union policy co-ordination instruments,
through the Broad Economic Policy Guidelines.

in particular

The last ones adopted by the Council on 26 June 2003 address the need to:

(i)

redirect public expenditure towards growth (cid:1) enhancing cost (cid:1) effective investment in physical and
human capital and knowledge;

(ii) ensure long-run sustainability of public finances; and

(iii) ensure social sustainability.

(1) COM(2003) 283 final.