2005/334/EC: Council Decision of 18 January 2005 establishing, in accordance with Article 104(8) of the Treaty establishing the European Community, whether effective action has been taken by the Hellenic Republic in response to recommendations of the Council in accordance with Article 104(7) of that Treaty
Date: 2005-01-18
Institutions: Council of the European Union
Subjects: Greece, budget deficit, budget policy, multilateral surveillance, public debt, stability pact

L 107/24

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Official Journal of the European Union

28.4.2005

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 18 January 2005

establishing, in accordance with Article 104(8) of the Treaty establishing the European Community,
whether effective action has been taken by the Hellenic Republic in response to recommendations
of the Council in accordance with Article 104(7) of that Treaty

(2005/334/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 104(8) thereof,

establishing the European

the Council and the Commission,
Treaty and the Stability and Growth Pact
and timely manner.

to implement

the
in a strict

Having regard to the recommendation from the Commission,

(4)

By Decision 2004/917/EC (3) of 5 July 2004, the Council
decided, in accordance with Article 104(6) of the Treaty,
that an excessive deficit exists in Greece.

Whereas:

(1)

(2)

In accordance with Article 104 of the Treaty, Member
States are to avoid excessive government deficits.

(5)

as

sound

finances

a means

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
includes
creation. The Stability
Council Regulation (EC) No 1467/97 of 7 July 1997
on speeding up and clarifying the implementation of
the excessive deficit procedure (1), set out in Article 104
of the Treaty, in order to further the prompt correction
of excessive general government deficits.

and Growth Pact

(3)

The Amsterdam Resolution of the European Council on
the Stability and Growth Pact of 17 June 1997 (2)
solemnly invites all parties, namely the Member States,

The Council,
in accordance with Article 104(7) of the
Treaty and Article 3(4) of Regulation (EC) No 1467/97,
adopted a recommendation establishing the deadline of 5
November 2004 for the Greek Government
to take
measures to bring the existence of an excessive deficit
to an end in 2005 at the latest. In that recommendation
the Council recommended the Hellenic Republic to put
an end to the present excessive deficit situation as rapidly
the latest and to take
as possible and by 2005 at
corrective measures mainly of
structural nature
least 1 % of GDP, cumulated over
amounting to at
2004 and 2005, and preferably equally distributed
between the two years. In addition, the Council recom-
mended the Hellenic Republic
the
government gross debt ratio diminishes sufficiently and
approaches the reference value at a satisfactory pace,
while paying particular attention to factors other than
net borrowing which contribute to the change in debt
levels. Finally, as a matter of urgency, the Council also
the
recommended the Hellenic Republic to correct
revealed on budgetary statistics,
serious deficiencies
through the
collection and
the
processing of general government data.

improvement of

to ensure

that

a

(1) OJ L 209, 2.8.1997, p. 6.
(2) OJ C 236, 2.8.1997, p. 1.

(3) OJ L 389, 30.12.2004, p. 25.

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Official Journal of the European Union

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(6)

(7)

In accordance with Article 4(2) of Regulation (EC) No
1467/97,
the Council, when considering whether
effective action has been taken in response to its recom-
mendations made in accordance with Article 104(7) of
the Treaty, is to base its decision on publicly announced
decisions by the Government of
the Member State
concerned.

An assessment of the publicly announced decisions taken
by the Hellenic Republic since the Recommendation in
accordance with Article 104(7) of the Treaty was issued
by the Council and up to the deadline set in that Recom-
mendation leads to the following conclusions:

(8)

— in spite of restraining measures announced for 2004,
fiscal policy has been clearly expansionary,
in
contrast to what was requested by the Council. This
is partly due to the statistical revisions, carried out in
cooperation with Eurostat to apply correctly the ESA
95 statistical system, and to expenditure overruns
the Olympic
associated with the organisation of
in some other
Games, as well as
in certain revenue
spending items and shortfalls
items, which had not been correctly estimated in
the 2004 budget,

to overruns

— the budgetary measures announced for 2005, while
more than offsetting the slippage in 2004, may not
ensure that the general government deficit is brought
below 3 % of GDP in 2005,

— not only is the general gross debt-to-GDP ratio not
falling at a satisfactory pace, but the large stock-flow
adjustment projected in 2004 also indicates that the
Greek Government has taken no effective action on
below-the-line operations contributing to further rises
in the debt;

— the Hellenic Republic has improved the collection
in
and processing of budgetary data, notably
relation to expenditure on military
equipment,
interest payments,
security accounts.
and social
Further steps, undertaken in close cooperation with
Eurostat, will ensure the prompt and correct supply
of
the general government data required by the
existing legal framework.

Article 104(8) of the Treaty states that when the Council
establishes that
there has been no effective action in
response to its recommendation in accordance with
Article 104(7) of that Treaty,
it may decide to make
this recommendation public. However, in line with the
Stability and Growth Pact Resolution of the European
Council,
the Hellenic Republic made this recommen-
dation public in July 2004,

HAS DECIDED AS FOLLOWS:

Article 1

The Hellenic Republic has not taken effective action in response
to the Council recommendation of 5 July 2004 within the
period laid down in that recommendation.

Article 2

This Decision is addressed to the Hellenic Republic.

Done at Brussels, 18 January 2005.

For the Council
The President

J.-C. JUNCKER