REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Interim Progress Report on the implementation of Council Directive 2024/1265/EU of 29 April 2024 amending Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States
Date: 2025-06-30
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU Member State, budget deficit, budget estimate, budget policy, fiscal policy, national budget, national implementing measure, national planning, stability pact

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  EN 

   EUROPEAN COMMISSION  Brussels, 30.6.2025  COM(2025) 317 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Interim Progress Report on the implementation of Council Directive 2024/1265/EU of 29 April 2024 amending Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States     {SWD(2025) 161 final}  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Interim progress report on the implementation of Council Directive 2024/1265/EU of 
29 April 2024 amending Council Directive 2011/85/EU on requirements for budgetary 
frameworks of the Member States 

1. 

INTRODUCTION 

Council  Directive  2011/85/EU  on  requirements  for  budgetary  frameworks  of  the  Member 
States1  entered  into  force  in  December 2011.  It  was  an  important  part  of  the  legislative 
package  on  the  strengthening  of  economic  governance,  also  known  as  the  ‘six-pack’.  The 
Directive  set,  for  the  first  time,  minimum  requirements  for  budgetary  frameworks  for  EU 
Member  States. As  stipulated  in  the  Directive  and  taking  into  account  the  experience  since 
2011, the whole system of economic surveillance was recently reviewed, leading to a reform 
of the Stability and Growth Pact which entered  into force on 30 April 2024. In this context, 
Council Directive 2011/85/EU was amended by Council Directive 2024/1265/EU2. 

Directive  2011/85/EU  had  introduced  minimum  requirements  for  systems  of  budgetary 
accounting  and  statistical  reporting,  rules  and  procedures  governing  the  preparation  of 
forecasts  for  budgetary  planning,  country-specific  numerical  fiscal  rules,  medium-term 
budgetary  frameworks,  and  mechanisms  that  regulate  fiscal  relationships  between  public 
authorities  across  sub-sectors  of  general  government.  While  the  review  covered  all  of  these 
provisions, looking at whether they were still relevant and had been understood and applied as 
intended, the review also considered new developments. In particular, the role of independent 
fiscal institutions has increased significantly since 2011 and the fiscal implications of climate 
change  have  become  more  and  more  pressing.  Directive  2024/1265/EU,  with  the  resulting 
amendments  to  Directive  2011/85/EU,  has  to  be  transposed  into  national  law  by  the  EU 
Member States by 31 December 2025. 

Under  Article 2(5)  of  Directive  2024/1265/EU,  the  Commission  is  asked  to  ‘prepare  an 
interim progress report on the implementation of the main provisions of this Directive on the 
basis of relevant information from Member States, which shall be submitted to the European 
Parliament and to the Council by 30 June 2025’. To that end, the Commission submitted to 
the  Economic  and  Financial  Committee  (alternates)  in  March 2025  a  questionnaire  giving 
Member States the opportunity to give details of measures in place, reforms already launched 
and  specific  plans.  Accordingly,  this  interim  progress  report  is  based  primarily  on  the 
information  provided  by  the  Member  States.  By  April  2025  most  Member  States  had 
delivered  their  contributions  3.  Detailed  country  fiches  are  presented  in  the  accompanying 
Commission staff working document (SWD(2025) 161). 

1 
OJ L 306, 23.11.2011, p. 41. 
2  
Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 
2024 and Council Regulation (EU) 2024/1264 of 29 April 2024 amending Regulation (EC) No 
1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure 
and  Council  Directive  (EU)  2024/1265  of  29  April  2024  amending  Directive  2011/85/EU  on 
requirements for budgetary frameworks of the Member States. 
3 
6 Member States have reported in May 2025. 

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The purpose of this interim progress report is to inform the European Parliament, the Council 
and the general  public  about  the progress  made in transposing the  amendments  to  Directive 
2011/85/EU.  It  should  not  therefore  be  construed  as  an  assessment  of  the  conformity  of 
national provisions with the amended Directive, which will be performed following the expiry 
of  the  transposition  deadline  in  accordance  with  EU  law.  To  provide  a  suitable  overview, 
Section 2 of this report is structured around five sub-sections corresponding to the main areas 
of amendments to the Directive, followed by a conclusion summarising the main findings. 

2. 

2.1 

PROGRESS IN TRANSPOSING THE MAIN PROVISIONS OF THE DIRECTIVE 

Amendments to provisions on accounting, statistics and transparency (Articles 3 
and 14(1) of Directive 2011/85/EU) 

Sound  fiscal  policy  must  be  based  on  sound  fiscal  reporting.  Comprehensive,  timely  and 
accurate  information  on  budgetary  execution  is  essential  for  policymakers  as  it  ensures  the 
correct execution of budgets, the timely monitoring of possible deviations from plans and up-
to-date budgetary planning. Comprehensive and consistent public financial reporting requires 
transparency  on  elements  that,  potentially,  have  a  direct  or  indirect  impact  on  the  budget: 
these may include, for example, bodies and funds that do not form part of the regular budget 
but are part of general government, tax expenditures and contingent liabilities. 

Amendments  to  Directive  2011/85/EU  in  this  area  mainly  introduced  changes  to  the  public 
availability  of  fiscal  data  for  all  subsectors  of  general  government,  as  defined  by  the  ESA 
2010.  In  particular,  monthly  and  quarterly  cash-based  data  (or  equivalent  data  from  public 
accounting)  were  replaced  with  quarterly  data  on  debt  and  deficits  for  all  sub-sectors  of  general 
government.  However,  if  a  Member  State  has  in  place  integrated,  comprehensive  and 
nationally harmonised accrual financial accounting systems, quarterly deficit data by sub-sector 
is not requested. The remaining amendments concern mainly clarifications and updates to the 
text in light of experience with its interpretation since 2011. 

Regarding the revision of the frequency of reporting of certain  fiscal  data (the main change 
introduced by the amendments to Article 3(2)), contingent also on the prevalence of accrual 
accounting,  a  third  of  the  Member  States  see  this  as  fully  transposed  and  another  third  as 
partly  achieved.  While  not  all  of  these  respondents  report  whether  they  intend  to  cover  the 
new  requirement  via  reporting  of  quarterly  deficit  data  or  with  reference  to  the  maturity  of 
their accrual  accounting system,  about  a fifth  of  the Member States account  for each of the 
two options. The remaining respondents focus more on the planned process, partly by quoting 
specific laws to be amended, partly with less detail. 

Looking  at  the  clarified  requirement  to  publish,  also  as  part  of  multiannual  budgetary 
processes, information on bodies and funds that do not form part of the budget but are part of 
general  government,  and  to  inform  on  their  combined  impact  on  government  balances 
(Article 14(1)), a  third of Member States  see this as  already covered.  Among the remaining 
respondents, about a fifth of Member States plan specific actions while another fifth intend to 
still evaluate the need to do so. 

Smaller  changes  to  Articles  2  and  3(1)  are  not  reported  to  require  specific  amendments  to 
national laws. 

Moreover, Article 16(1) of the amended Directive stipulates that ‘by 31 December 2025 and 
every  five  years  thereafter,  the  Commission  shall  report  on  the  state  of  play  of:  (a)  public 
accounting by the general  government  in  the Union,  taking into account  the progress made 
since  its  2013  assessment  of  the  suitability  of  the  International  Public  Sector  Accounting 

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Standards for the Member States’. In this regard, the requirement to publish this report before 
the end of 2025 further stresses the importance of monitoring the presence and development 
of sound accrual-based public accounting in the EU. 

2.2 

New provisions on independent fiscal institutions (Articles 2 and 8a of Directive 
2011/85/EU) 

Independent fiscal institutions (IFIs) have gained  significantly in importance since Directive 
2011/85/EU entered into force. Since 2011, the Directive has called on ‘independent bodies or 
bodies  endowed  with  functional  autonomy  vis-à-vis  the  fiscal  authorities  of  the  Member 
States’ to monitor the compliance of Member States with their national numerical fiscal rules. 
In 2012, common principles on national fiscal correction mechanisms (introduced by Title III, 
the  ‘Fiscal  Compact’,  of  the  intergovernmental  Treaty  on  Stability,  Coordination  and 
Governance in  the Economic and Monetary Union) included certain  minimum  requirements 
for independent monitoring bodies. Later, Regulation 2013/473/EU, which applies to the euro 
area,  called  for  such  bodies  to  produce  or  endorse  the  macroeconomic  forecasts  underlying 
annual and medium-term budgetary planning. 

The amendments to Directive 2011/85/EU bring together all these existing elements and make 
them  applicable  for  all  EU  Member  States.  They  sharpen  and  improve  some  independence 
safeguards (e.g. emphasising the communication capacity of IFIs, asking for stable resources 
and  timely  access  to  information  as  well  as  requiring  regular  external  evaluation  of  IFIs). 
Some  new  tasks  are  related  to  the  reformed  Stability  and  Growth  Pact.  Other  new  tasks 
include  performing  an  assessment  of  the  consistency,  coherence  and  effectiveness  of  the 
national  fiscal  framework  and  participating,  upon  invitation,  for  parliamentary  hearings  and 
discussions.  Finally,  a  ‘comply-or-explain’  principle  is  introduced  for  national  authorities 
regarding the assessments of IFIs. 

Not  surprisingly,  all  Member  States  have  already  covered  some  or  even  many  of  the 
amendments  on  IFIs  in  national  law,  given  that  the  amendments  bring  together,  to  some 
degree, existing provisions related to EU law or the Fiscal Compact. Poland is a specific case 
as the country still has no operating IFI in place yet; however, based on information provided 
by  Poland,  the  relevant  legislation  entered  into  force  in  January  2025  and  the  IFI  will  be 
established by 1 January 2026. 

Regarding most of the independence safeguards set out in Article 8a(3) and (4), a third of the 
Member  States  see  them  as  being  covered  already  in  their  national  law,  while  more  than  a 
third consider that some measures are still necessary. The exception is the new requirement to 
submit  the  IFIs  to  regular  external  evaluations  where  only  very  few  Member  States  report 
having the necessary legislation in place. In several cases, established practice is reported to 
be in line with the new requirements. However, legal codification would still be necessary. 

Regarding  the  tasks  of  the  IFIs,  Member  States  use  the  opportunity  of  transposing  the 
Directive  provisions  to  specify  further  some  institutional  set-ups  or  underlying  legislation. 
This might explain why more than a third of the Member States report that transposition is not 
complete  for  the  current  legal  tasks  of  IFIs  (i.e.  to  produce  or  endorse  macroeconomic 
forecasts  underlying  the  budgetary  planning  and  to  monitor  compliance  with  national  fiscal 
rules).  Similarly,  the  legal  set-up  still  often  needs  to  reflect  the  new  IFI  tasks  set  in  the 
preventive and the corrective arm of the Stability and Growth Pact, together with the task of 
assessing  regularly  the  consistency,  coherence  and  effectiveness  of  the  national  fiscal 
frameworks. 

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In  the  same  vein,  although  the  ‘comply-or-explain  principle’  is  in  place  to  some  degree  in 
many  Member  States  (as  it  was  introduced  by  the  common  principles  related  to  the  Fiscal 
Compact), it still needs adaptation to its wider use in line with amendments to the Directive. 

2.3 

Amendments to provisions on medium-term budgetary frameworks (Articles 2, 
9, 10 and 11 of Directive 2011/85/EU) 

Under  Directive  2011/85/EU,  Member  States  are  required  to  establish  a  credible,  effective 
medium-term  budgetary  framework,  enabling  them  to  expand  fiscal  planning  beyond  the 
annual  horizon  and  thereby  fostering  more  consistent,  effective  and  potentially  ambitious 
policymaking  over  the  medium  term.  The  framework  must  contain  multiannual  budgetary 
objectives in combination with projections of each major revenue and expenditure item based 
on unchanged policies, with explanations of the policies envisaged over the medium term to 
bridge the gap between the no-policy change projections and policy targets.  Additionally, it 
must contain an assessment  of how the policies  envisaged are likely  to  affect  the long-term 
sustainability of public finances. 

The amendments to Directive 2011/85/EU enhance the required elements of the medium-term 
budgetary framework by calling for a description of planned reforms and investments together 
with  an  assessment  of  the  impact  of  planned  policies  on  sustainable  and  inclusive  growth. 
They also clarify that annual budgets must be consistent with medium-term planning. 

The Directive definition of medium-term  budgetary frameworks is  reported to  be already  in 
place for a quarter of Member States. Around a quarter of respondents report their intention to 
transpose this provision or have plans to do so according to a clear timeline before or by the 
end  of  2025.  Another  quarter  of  Member  States  did  not  provide  information  on  their 
assessment of the state of play regarding the transposition of this provision or the need to take 
additional measures. 

Half of Member States report full or partial transposition of the provision to ensure that the 
national framework is based on comprehensive and transparent national budgetary objectives 
over the medium  term  that  are consistent with  the country-specific numerical  fiscal  rules in 
force  and  the  relevant  provisions  of  Regulation  (EU)  2024/1263.  More  than  a  third  of 
respondents have indicated that these provisions have not yet been transposed. 

Similarly,  more  than  a  third  of  Member  States  declare  full  or  partial  transposition  of  the 
provision to include a description of the envisaged reforms and investments with an impact on 
sustainable  and  inclusive  growth.  Roughly  half  of  respondents  report  their  intention  to 
transpose this provision or have plans to do so according to a clear timeline or by the end of 
2025. 

In around a quarter of cases, Member States report that there are national provisions in place 
to assess the impact of the policies envisaged on sustainable and inclusive growth. A similar 
proportion of Member States shared that these provisions have not yet been transposed. 

Thirteen  Member  States  declare  full  or  partial  transposition  of  the  provision  to  ensure  the 
consistency of the  annual  budget  legislation with the national budgetary  objectives over the 
medium-term. Ten Member States either do not provide information on the state of play of the 
transposition of this requirement or indicate that it has not yet been transposed. Eight Member 
States give clear indications of their envisaged transposition calendar, while five others have 
yet to define a timeline. 

The  clarifications  to  Article 11  are  reported  as  already  fully  or  partially  transposed  by  nine 
Member States; five Member States indicate that they plan to meet the transposition deadline 
of end-2025. 

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2.4 

New  provisions  on  reporting  requirements  relating  to  macrofiscal  risks  from 
natural  disasters  and  climate  change  (Articles  9(2)(d)  and  14(3)  of  Directive 
2011/85/EU) 

Since Directive 2011/85/EU entered into force, the implications of climate change and natural 
disasters have become increasingly apparent for fiscal policy. Both aspects are linked but are 
not  identical.  Member  States  experience  more  frequent  and  severe  natural  disasters,  often 
associated  with  rising  temperature  levels,  and  these  can  cause  significant  fiscal  costs  and 
substantial  contingent  liabilities.  Fiscal  costs  linked  to  climate  change  can,  in  addition,  also 
stem from mitigation and adaptation measures. 

Directive  2024/1265/EU  therefore  introduces  new  requirements  in  Directive  2011/85/EU. 
Member  States  are  now  requested  to  assess  the  impact  of  the  policies  envisaged  on  the 
medium-term  and  long-term  sustainability  of  public  finances,  taking  into  account  the 
macrofiscal risks from climate change in their medium-term budgetary planning documents. 
They must  publish information  on  natural  disasters and climate-related  contingent  liabilities 
and report on related fiscal costs incurred. Considering the complexity of these tasks and the 
fast developments in this field, all these requirements have to be complied with ‘to the extent 
possible’.  For  the  transposition,  Member  States  are  asked  to  include  provisions  in  their 
national laws which ensure the necessary assessment and reporting. 

Only a few national fiscal frameworks already include, either fully or partially, provisions that 
consider  macrofiscal  risks  from  climate  change  and  its  environmental  and  distributional 
impact  in  the  assessment  of  the  impact  of  the  envisaged  medium-term  policies  on  the 
medium-term and long-term sustainability of public finances. At the same time, more than a 
third  of  respondents  give  indications  of  the  envisaged  calendar  for  the  adoption  of  such 
provisions in the national fiscal framework. A similar picture emerges for the requirement to 
publish  information  on  disaster  and  climate-related  contingent  liabilities  and  fiscal  costs 
incurred owing to natural disasters and climate-related shocks. 

2.5 

Clarification amendments (Articles 2, 3, 4, 5, 6 and 7 of Directive 2011/85/EU) 

Since  Directive  2011/85/EU  entered  into  force,  practice  has  shown  that  some  concepts  and 
terms have been understood in different ways or would benefit from more clarity or updating. 
For  example,  a  reference  to  the  use  of  the  ESA 95  accounting  standard  (in  the  previous 
Article 3(1))  was  replaced  by  a  more  dynamic  reference.  For  most  of  these  clarifications, 
Member States were mainly asked to check whether their national budgetary laws would also 
need corresponding changes. 

Half of the Member States see the clarification amendments as being already fully covered by 
their  national  laws.  A  further  quarter  indicate  that,  although  the  clarifications  are  widely 
covered, some changes to specific national provisions would be still required. Another quarter 
report  more  general  information  on  the  transposition  process  or  points  to  ongoing 
assessments. 

3. 

CONCLUSION 

Overall,  Member  States  reported  uneven  progress  in  transposing  the  amendments  to  the 
Directive. Correspondingly, the information on  the transposition steps that had already been 
taken varied strongly both in substance and in terms of references to the specific legal acts to 
be amended. A clear timeline for the remaining steps is generally missing. 

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Most of the Member States that report specifically on the transposition of the amendments on 
statistics, accounting and transparency consider the requirements as either covered or within 
reach, while for several Member States not much detail is available. 

Progress  seems  advanced  regarding  IFIs  supported  by  similar  but  not  identical  provisions 
which have applied to all or most Member States since 2011. However, some of the Directive 
provisions  still  require  careful  consideration  by  Member  States  when  assessing  the  need  to 
take measures  to  transpose  them into national  legislation. Some positive elements  regarding 
independence are in some cases rather established practice and would need legal codification. 
In particular, new elements, such as the emphasis on communication capacity or the external 
evaluation of the IFIs, often still require legal steps. 

While  many  Member  States  report  that  the  definition  of  the  medium-term  budgetary 
framework  is  in  line  with  the  amended  Directive,  some  adjustments  are  still  planned  or 
needed in most Member States to strengthen the framework and ensure consistency with the 
EU  economic  governance  framework  regarding  the  new  preventive  arm  regulation  and  the 
amended corrective arm regulation. 

The  new  climate-related  provisions  remain  largely  to  be  addressed  and  Member  States  still 
need to define their timelines for doing this. 

The  Commission  will  continue  to  implement  the  Directive  for  the  sections  it  is  responsible 
for. After the transposition deadline, it will conduct a fully-fledged compliance assessment in 
line with standard EU procedures. 

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