COMMUNICATION FROM THE COMMISSION Assessment of action taken by SPAIN, FRANCE, MALTA, THE NETHERLANDS and SLOVENIA in response to the Council Recommendations of 21 June 2013 with a view to bringing an end to the situation of excessive government deficit, and by BELGIUM in response to the Council Decision to give notice of 21 June 2013
Date: 2013-11-15
Institutions: European Commission
Subjects: Belgium, France, Malta, Netherlands, Slovenia, Spain, budget deficit, budgetary equilibrium, stability pact, stability programme, structural adjustment

EUROPEAN 
COMMISSION 

Brussels, 15.11.2013  
COM(2013) 901 final 

COMMUNICATION FROM THE COMMISSION 

Assessment of action taken 
by SPAIN, FRANCE, MALTA, THE NETHERLANDS and SLOVENIA 

in response to the Council Recommendations of 21 June 2013 with a view to bringing an 
end to the situation of excessive government deficit, and 

by BELGIUM 

in response to the Council Decision to give notice of 21 June 2013 

EN 

   EN 

 
 
 
 
  
 
 
  
 
1. 

INTRODUCTION 

On  21  June  2013,  following  the  publication  of  the  Commission  2013  Spring  Forecast  and 
assessments  by the  Commission of Member States' Stability and Convergence Programmes, 
the Council decided that a number of steps under the excessive deficit procedure (Article 126 
of the Treaty) were required for Belgium, Spain, France, Malta, the Netherlands, Portugal and 
Slovenia1.  

In  particular,  the  Council  reviewed  the  existing  excessive  deficit  situation  of  Spain,  France, 
the  Netherlands,  Portugal  and  Slovenia.  It  considered  that  these  Member  States  had  taken 
effective  action  in  compliance  with  Council  recommendations  under  Article  126(7)  of  the 
Treaty, and that unexpected adverse economic events with major unfavourable consequences 
for  government  finances  had  occurred  after  the  adoption  of  the  original  recommendations. 
Therefore,  the  Council  (following  recommendations  from  the  Commission)  considered  that 
for  these  Member  States,  the  conditions  foreseen  in  Article  3(5)  of  Regulation  (EC)  No 
1467/97 were fulfilled, to issue new recommendations under Article 126(7) of the Treaty. The 
Council  extended  the  existing  deadlines  for  correcting  the  excessive  deficit  to  2014  for  the 
Netherlands, to 2015 for France, Portugal and Slovenia and to 2016 for Spain. The Council 
established a deadline of 1 October for these countries to take effective action and, (with the 
exception  of  Portugal2)  to  report  in  detail  the  consolidation  strategy  that  is  envisaged  to 
achieve the targets in accordance with Article 3(4a) of Council Regulation (EC) No 1467/973.  

Moreover, on the basis of a Commission recommendation the Council decided under Article 
126(8)  of  the  Treaty  that  Belgium  had  not  taken  effective  action  in  compliance  with  the 
Council  Recommendation  of  2  December  2009  to correct  its excessive deficit  by 2012, and 
under  Article  126(9)  of  the  Treaty  to  give  notice  to  put  an  end  to  the  excessive  deficit 
situation by 2013. Belgium was given a deadline of 15 September to report on the measures 
taken  to  comply  with  this  decision  in  accordance  with  Article  5(1a)  of  Council  Regulation 
(EC) No 1467/97. 

Finally,  the  Council  decided  (on  proposals  from  the  Commission)  to  open  a  new  excessive 
deficit procedure for Malta under Article 126(6) of the Treaty and issued a recommendation 
under Article 126(7) to the country, with a view to end the excessive deficit situation by 2014. 
The  Council  established  a  deadline  of  1  October  for  Malta  to  take  effective  action  and,  in 
accordance with Article 3(4a) of Council Regulation (EC) No 1467/97, to report in detail the 
consolidation strategy that is envisaged to achieve the targets. 

1 

2 

3 

All documents related to the excessive deficit procedure of any of the Member States can be found at:  
http://ec.europa.eu/economy_finance/economic_governance/sgp/corrective_arm/index_en.htm  
Note  that  on  21  June,  the  Council  also  issued  new  recommendations  under  Article  126(7)  to  Poland. 
The  Polish  authorities  submitted  a  report  to  the  Commission  on  action  taken  in  compliance  with  the 
recommendation.  The  assessment  of  this  report  is  subject  of  a  Commission  recommendation  for  a 
Council decision under Article 126(8), also adopted on 15 November 2013.  
Portugal  will  report  in  the  context  of  its  macroeconomic  adjustment  programme.  In  line  with  Article 
10(2a)  of  Regulation  (EU)  No  472/2013,  it  is  exempt  from  a  separate  reporting  under  the  excessive 
deficit procedure.  
OJ L 209, 2.8.1997, p. 6. 

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ASSESSMENT OF ACTION TAKEN 

2. 
According to Regulation (EC) No 1467/97 and the revised Code of Conduct4 a Member State 
should  be  considered  to  have  taken  effective  action  if  it  has  acted  in  compliance  with  the 
Article  126(7)  TFEU  recommendation.  The  Code  of  Conduct  states  that  the  assessment  of 
effective  action  should  in  particular  take  into  account  whether  the  Member  State  concerned 
has  achieved  the  annual  budgetary  targets  and  the  underlying  improvement  of  its  cyclically 
adjusted balance, net of one-off and other temporary measures, initially recommended by the 
Council.  In  case  the  observed  budget  balance  proves  to  be  lower  than  recommended  or  the 
improvement of the cyclically adjusted balance, net of one-off and other temporary measures, 
falls  short  of  the  adjustment  underlying  the  target,  a  careful  analysis  of  the  reasons  for  the 
shortfall should be made. In case of a multi-annual adjustment, the Code of Conduct specifies 
that the assessment should mainly focus on the measures already announced or taken in order 
to ensure adequate progress toward the correction of the excessive deficit within the deadline 
set by the Council. 

Belgium,  Spain,  France,  Malta,  the  Netherlands  and  Slovenia  submitted  to  the  Commission 
reports on action taken in compliance with the 21 June Council recommendations and Council 
decision.  In  the  case  of  Portugal,  which  is  subject  to  a  macroeconomic  adjustment 
programme,  the  reporting  of  its  budgetary  strategy  takes  place  in  the  context  of  the 
programme, in line with Article 10(2) of Regulation (EU) No 472/2013 that entered into force 
on  30  May  2013.  Belgium,  Spain,  France,  Malta,  the  Netherlands,  and  Slovenia  also 
submitted  their  Draft  Budgetary  Plans  for  the  forthcoming  year  to  the  Commission  and  the 
Eurogroup, in line with Regulation (EU) No 473/20135. 

The  Commission  reviewed  the  reports  on  effective  action  submitted  by  the  Member  States 
and made an assessment of effective action against the background of the Commission 2013 
Autumn  Forecast,  published  on  5  November  2013.  In  the  case  of  euro  area  Member  States 
Belgium, Spain, France, Malta, the Netherlands and Slovenia this assessment is also reflected 
in  the  Commission  Opinion  of  15  November  2013  on  the  draft  budgetary  plans  of  these 
Member States6. The main conclusions of this assessment are reflected in the Annex to this 
Communication.  

3. 

EURO  AREA  MEMBER  STATES  SUBJECT  TO  A  MACROECONOMIC  ADJUSTMENT 
PROGRAMME 

Since the entry into force of Regulation (EU) No 472/2013 on the strengthening of economic 
and budgetary surveillance of Member States in the euro area experiencing or threatened with 
serious difficulties with respect to their financial stability on 30 May 2013, the monitoring of 
euro  area  Member  States  subject  to  a  macroeconomic  adjustment  programme's  compliance 
with their recommendations under the excessive deficit procedure – which shall integrate the 
annual  budgetary  targets  of  the  macroeconomic  adjustment  programme  in  accordance  with 
Article  10(2b)  of  the  same  Regulation  –  takes  place  within  the  regular  monitoring  of  the 
programme provided for by Article 7(4) of the same Regulation.  

4 

5 

6 

“Specifications  on  the  implementation  of  the  Stability  and  Growth  Pact  and  guidelines  on  the  format 
and content of stability and convergence programmes”, available at: 
http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm . 
Poland  (which  is  not  a  euro  area  Member  State)  and  Portugal  (which  is  subject  to  a  macroeconomic 
adjustment programme), are not required to submit a Draft Budgetary Plan.  
The  analysis  by  the  Commission  services  to  underpin  this  assessment  is  published  in  Staff  Working 
Documents accompanying the Commission Opinions.  

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This Article establishes that the Commission shall monitor the progress made by a Member 
State in the implementation of its macroeconomic adjustment programme and inform the EFC 
of such progress every three months. In accordance with the constant practice followed by the 
Commission,  the  monitoring  of  progress  made  by  the  concerned  Member  State  in  the 
budgetary area focuses on whether the corrective measures negotiated with the Member State 
have  been  adequately  implemented.  Evidence  of  having  effectively  taken  the  measures 
detailed in the programme for the achievement of the budgetary targets is therefore considered 
sufficient to conclude that the Member State concerned has taken effective action to correct 
the excessive deficit in the sense of Articles 3 and 5 of Regulation (EC) No 1467/97. 

This methodology – which replaces the method described in the Code of Conduct – takes into 
account  the  specific  nature  of  the  economic  and  budgetary  discipline  applying  to  Member 
States subject to a macro-economic adjustment programme. In particular, it takes into account 
the fact that the economic scenario and the measures to be taken are agreed and detailed. 

4. 

CONCLUSIONS 

The  Commission  has  assessed  the  budgetary  situation  and  in  particular  action  taken  in 
compliance  with  the  Council's  recommendations  (or  in  the  case  of  Belgium,  the  decision  to 
give notice). The Commission considers that Belgium, Spain, France, Malta, the Netherlands 
and Slovenia have taken effective action and that for these Member States, no further steps in 
the excessive deficit procedure are needed at present. Details of the Commission's assessment 
are  reported  in  the  Commission  Opinions  on  the  Draft  Budgetary  Plans  of  these  Member 
States.  Finally,  the  Commission  recalls  that  in  the  case  of  Portugal,  the  last  programme 
compliance review ended on 3 October 2013, and was concluded positively.  

The Commission will continue to closely monitor budgetary developments in accordance with 
the Treaty and the SGP. 

4