2005/136/EC: Council Decision of 2 June 2004 on the existence of an excessive deficit in the Netherlands
Date: 2004-06-02
Institutions: Council of the European Union
Subjects: Netherlands, budget deficit, public administration, public debt, stability pact

L 47/26

EN

Official Journal of the European Union

18.2.2005

COUNCIL DECISION

of 2 June 2004

on the existence of an excessive deficit in the Netherlands

(2005/136/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 104(6) thereof,

establishing the European

Having regard to the recommendation from the Commission,

Having regard to the observations made by the Netherlands,

Whereas:

(1)

According to Article 104 of the Treaty Member States
are to avoid excessive government deficits.

(5)

(6)

(2)

(3)

sound

government

The Stability and Growth Pact is based on the objective
of
of
strengthening the conditions for price stability and for
strong sustainable growth conducive to employment
creation.

a means

finances

as

The
excessive deficit procedure under Article 104
provides for a decision on the existence of an excessive
deficit; the Protocol on the excessive deficit procedure
annexed to the Treaty sets out
further provisions
relating to the implementation of the excessive deficit
procedure. Council Regulation (EC) No 3605/93 of
22 November 1993 on the application of the Protocol
on the excessive deficit procedure annexed to the Treaty
establishing the European Community (1)
lays down
detailed rules and definitions for the application of the
provisions of the said Protocol.

exists or may occur. The Commission addressed such an
to the Council on
opinion to the Netherlands
19 May 2004. Having examined all relevant
factors
taken into account
in accordance with
in its report
Article 104(3) and having regard to the opinion of the
Economic and Financial Committee in accordance with
Article 104(4), the Commission concluded in its opinion
of 19 May 2004 that there exists an excessive deficit in
the Netherlands.

Article 104(6) of the Treaty lays down that the Council
should consider any observations which the Member
State concerned may wish to make before deciding,
after an overall assessment, whether an excessive deficit
exists.

by

the

savings measures

The overall assessment leads to the conclusion that the
general government deficit reached 3,2 % of GDP in
2003 in the Netherlands and that
the breach of the
3 % of GDP Treaty reference value occurred in spite of
substantial
authorities.
According to the Commission, the breach of the 3 %
of GDP threshold in 2003 is mainly due to the impact
of the economic slowdown. However, the excess of the
general government deficit over the 3 % of GDP reference
value does not result from an unusual event outside the
control of the Dutch authorities, nor is it the result of a
severe economic downturn in the sense of the Stability
and Growth Pact, which is defined as a fall in real GDP
of at least 2 %. Even after taking into account the addi-
tional measures decided by the authorities on 16 April
2004, which were not
included in the Commission
Spring 2004 forecast, there is a risk that the general
government deficit could be above 3 % of GDP also in
2004. This suggests that the breach of the 3 % of GDP
Treaty reference value for
the deficit may not be
temporary. Finally, the debt ratio, which is projected to
reach 56,3 % of GDP in 2004 according to the
Commission Spring forecast, will continue to be below
the 60 % of GDP Treaty reference value in that year,

(4)

Article 104(5) of the Treaty requires the Commission to
if the Commission
address an opinion to the Council
considers that an excessive deficit in a Member State

HAS ADOPTED THIS DECISION:

Article 1

(1) OJ L 332, 31.12.1993, p. 7. Regulation as last amended by
Commission Regulation (EC) No 351/2002 (OJ L 55, 26.2.2002
p. 23).

From an overall assessment it follows that an excessive deficit
exists in the Netherlands.

18.2.2005

EN

Official Journal of the European Union

L 47/27

This Decision is addressed to the Kingdom of the Netherlands.

Article 2

Done at Luxembourg, 2 June 2004.

For the Council
The President

C. McCREEVY