2005/729/EC: Council Decision of 7 June 2005 abrogating Decision 2005/136/EC on the existence of an excessive deficit in the Netherlands
Date: 2005-06-07
Institutions: Council of the European Union
Subjects: Netherlands, budget deficit, public finance, stability pact

20.10.2005

EN

Official Journal of the European Union

L 274/89

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 7 June 2005

abrogating Decision 2005/136/EC on the existence of an excessive deficit in the Netherlands

(2005/729/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 104(12) thereof,

establishing the European

Having regard to the recommendation from the Commission,

(4)

(5)

Whereas:

(1)

(2)

(3)

By Decision 2005/136/EC (1)
following a recommen-
dation from the Commission in accordance with Article
the Council decided that an
104(6) of
excessive deficit existed in the Netherlands.

the Treaty,

the Treaty,

the
In accordance with Article 104(7) of
Council made a Recommendation on 2 June 2004
addressed to the Netherlands with a view to bringing
the excessive deficit situation to an end. This Recommen-
dation, in conjunction with Article 3(4) of Council Regu-
lation (EC) No 1467/97 of 7 July 1997 on speeding up
and clarifying the implementation of the excessive deficit
procedure (2), established a deadline of 2005 at the latest
for the correction of the excessive deficit.

In accordance with Article 104(12) of
the Treaty, a
Council Decision on the existence of an excessive
deficit is to be abrogated when the excessive deficit in
the Member State concerned has,
in the view of the
Council, been corrected.

The definitions of ‘government’ and ‘deficit’ are laid down
in the Protocol on the excessive deficit procedure by
reference
Integrated
Economic Accounts, second edition. The data for the
the
excessive
Commission.

European System of

procedure

provided

to the

deficit

are

by

Based on the data provided by the Commission after
reporting by the Netherlands before 1 March 2005 in
accordance with 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
European Community (3), on the
establishing
subsequent
revised general government
accounts to Eurostat on 31 March 2005, and on the
services’
the
Spring
Commission
following conclusions are warranted:

the
reporting of

forecast,

2005

— the general government deficit is estimated at 2,3 %
of GDP in 2004, compared with 3,2 % in 2003. The
outcome for 2004 is in compliance with the Council
recommendation issued under Article 104(7) of the
Treaty, particularly as regards the reduction of the
government deficit below the reference value of 3 %
of GDP by 2005 at the latest. Fiscal adjustment was
pursued in 2004 in the form of substantial savings
measures, partly contained in the 2004 budget and
partly decided in the additional consolidation package
on 14 April 2004. Moreover, stronger-than-expected
tax receipts and additional revenues from the sale of
natural gas in response to high oil prices helped
reduce the deficit,

(1) OJ L 47, 18.2.2005, p. 26.
(2) OJ L 209, 2.8.1997, p. 6.

(3) 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).

L 274/90

EN

Official Journal of the European Union

20.10.2005

— the budgetary measures taken are geared towards
in the general
securing a
lasting improvement
government balance. For 2005,
the Commission
services’ Spring 2005 forecast projects a further
decline in the general government deficit to 2,0 %
of GDP,
largely in response to savings measures,
mostly of a structural nature, adding up to 0,5 % of
GDP. This is in line with the official target of a deficit
of 2,1 % of GDP. For 2006, the Commission services’
Spring 2005 forecast projects, based on currently
known policies, a further fall in the deficit to 1,6 %
of GDP, pointing to the durable correction of the
budget deficit,

— the budgetary consolidation will be sustained through
a reduction in the cyclically adjusted deficit which is
expected to reach close to balance after the excessive
the cyclically
deficit has been corrected.
fell markedly to 1,2 % of GDP,
adjusted deficit
compared
in 2003. The
Commission services’ Spring 2005 forecast projects
the cyclically adjusted deficit to further decrease in
2005 by another 0,8 % of GDP, to 0,4 % of GDP,
which is close to balance, and to fall to 0,0 % of GDP
in 2006,

to 2,0 % of GDP

In 2004,

2004. The Commission services’
Spring 2004
forecast projects it to remain below this threshold
in 2005 and 2006.

(6)

Decision 2005/136/EC should therefore be abrogated,

HAS ADOPTED THIS DECISION:

Article 1

From an overall assessment it follows that the correction of the
excessive deficit situation in the Netherlands was completed in
2004, under the terms of the recommendation addressed to the
Netherlands on 2 June 2004 in accordance with Article 104(7)
of the Treaty.

Article 2

Decision 2005/136/EC is hereby abrogated.

Article 3

This Decision is addressed to the Kingdom of the Netherlands.

Done at Luxembourg, 7 June 2005.

— according to the March 2005 excessive deficit
procedure notification,
the government debt ratio
was kept below the 60 % of GDP reference value in

For the Council
The President

J.-C. JUNCKER