2008/622/EC: Council Decision of 8 July 2008 abrogating Decision 2005/183/EC on the existence of an excessive deficit in Poland
Date: 2008-07-08
Institutions: Council of the European Union
Subjects: Poland, budget deficit, gross domestic product, public debt, public finance

L 200/22

EN

Official Journal of the European Union

29.7.2008

COUNCIL DECISION

of 8 July 2008

abrogating Decision 2005/183/EC on the existence of an excessive deficit in Poland

(2008/622/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Article 104(7), on a
Commission, confirming the 2007 deadline for
correction. The recommendation was made public.

recommendation from the
the

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

establishing the European

Having regard to the recommendation from the Commission,

Whereas:

(1)

(2)

(3)

By Council Decision 2005/183/EC (1),
following a re­
commendation from the Commission in accordance
it was decided that
with Article 104(6) of the Treaty,
an excessive deficit existed in Poland. The Council
noted that the general government deficit was 4,1 % of
GDP in 2003, above the 3 % of GDP Treaty reference
value, while general government gross debt stood at
45,4 % of GDP, below the 60 % of GDP Treaty
reference value. The Council decision stated that
the
deficit and the debt figures would have to be adjusted
upward if the funded pension schemes were excluded
following the
from the general government
the funded
Eurostat decision on the classification of
pension schemes (2).

sector

the

implementation of

On 5 July 2004, in accordance with Article 104(7) of the
Treaty and Article 3(4) of Council Regulation (EC)
No 1467/97 of 7 July 1997 on speeding up and clari­
fying
excessive deficit
procedure (3), the Council made, based on a recommen­
dation from the Commission,
recommendation
addressed to Poland with a view to bringing the
excessive deficit situation to an end by 2007 at
the
latest. The recommendation was made public.

the

a

On 28 November 2006,
the Council decided in
accordance with Article 104(8), on a recommendation
from the Commission, that action taken until then by
the Polish authorities was inadequate (4). On 27 February
2007, the Council issued a new recommendation under

(1) OJ L 62, 9.3.2005, p. 18.
(2) Eurostat News Releases No 30/2004 of 2 March 2004 and No

117/2004 of 23 September 2004.

(3) OJ L 209, 2.8.1997, p. 6. Regulation as amended by Regulation (EC)

No 1056/2005 (OJ L 174, 7.7.2005, p. 5).

(4) OJ L 414, 30.12.2006, p. 81.

(4)

(5)

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.

for

the data

implementation of

In accordance with the Protocol on the excessive deficit
the Commission
procedure annexed to the Treaty,
provides
the
the
procedure. As part of the application of this Protocol,
Member States are to notify data on government
deficits and debt and other associated variables twice a
year, namely before 1 April and before 1 October,
in
accordance with Article 4 of Council Regulation (EC)
No 3605/93 of 22 November 1993 on the application
the Protocol on the excessive deficit procedure
of
the European
annexed to the Treaty
Community (5).

establishing

(6)

Based on data provided by the Commission (Eurostat) in
accordance with Article 8g(1) of Regulation (EC)
No 3605/93 following the notification by Poland
before 1 April 2008 and on the Commission services'
spring 2008 forecast,
the following conclusions are
warranted:

— the general government deficit was reduced from
3,8 % of GDP in 2006 to 2,0 % of GDP in 2007,
which is below the 3 % of GDP deficit reference
value. This compares with a target of 3,4 % of GDP
set in the November 2006 update of the convergence
programme,

(5) OJ L 332, 31.12.1993, p. 7. Regulation as last amended by Regu­

lation (EC) No 2103/2005 (OJ L 337, 22.12.2005, p. 1).

29.7.2008

EN

Official Journal of the European Union

L 200/23

In addition,

— the much better 2007 deficit out-turn compared to
the target was supported by much higher real GDP
growth than assumed in the November 2006
convergence programme.
relative to
GDP, the government spent less on social transfers
indexation in 2007),
subsidies,
(due to lack of
compensation
employees.
investment
and
by 1,5
expenditure was
Overall,
percentage
the
in
than
November 2006 convergence programme. The
improvement
the
cyclically-adjusted balance net of one-off and other
temporary measures) is estimated at 1½ percentage
points of GDP in 2007,

structural balance

of
lower

planned

in the

points

total

(i.e.

— with lower GDP growth than in 2007, the spring
to increase in
2008 forecast projects the deficit
remain below the
2008 to 2,5 % of GDP, but
in social
reference value, driven mainly by cuts
income tax relief and an
contributions, personal
increase of
together with higher
investment. This is the same as the official deficit
the
target
convergence programme.
spring
forecast projects the deficit to broadly stabilise on a
no-policy-change basis. This indicates that the deficit
has been brought below the 3 % of GDP reference
value in a credible and sustainable manner,

in the March 2008 update of

For 2009,

transfers

social

the

set

— nonetheless,

the structural balance is projected to
deteriorate slightly by ¼ percentage point of GDP
in 2008 and, on a no-policy-change basis, improve
by about ⅓ percentage point in 2009. This has to be
seen against the need to make progress towards the
medium-term objective (MTO)
the budgetary
position, which for Poland is a structural deficit of
1 % of GDP,

for

— government debt declined from 47,6 % of GDP
in 2006 to 45,2 % in 2007. According to the
spring 2008 forecast, the debt ratio is projected to
remain well below the 60 % of GDP threshold and
fall further to around 44 % by the end of 2009.

(7)

In the view of the Council, the excessive deficit in Poland
has been corrected and Decision 2005/183/EC should
therefore be abrogated,

HAS ADOPTED THIS DECISION:

Article 1

From an overall assessment it follows that the excessive deficit
situation in Poland has been corrected.

Article 2

Decision 2005/183/EC is hereby abrogated.

Article 3

This Decision is addressed to the Republic of Poland.

Done at Brussels, 8 July 2008.

For the Council
The President

C. LAGARDE