CELEX: 52003SC0009
Language: en
Date: 2003-01-08 00:00:00
Title: Recommandation de décision du Conseil sur l'existence d'un déficit excessif en Allemagne - Application de l'article 104, paragraphe 6, du traité instituant la Communauté européenne

RESTREINT UE
                 COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  Brussels, 8.1.2003
                                                  SEC (2003) 9 final
                                                  EU RESTRICTED
                                  Recommendation for a
                                 COUNCIL DECISION
on the existence of an excessive deficit in Germany - Application of Article 104(6) of the
                     Treaty establishing the European Community
                              (presented by the Commission)
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                              EXPLANATORY MEMORANDUM                           15. 11, 2006
On 13 November 2002, the Commission released its Autumn ec( ilopic forecast, projectmg
for Germany a general government deficit of 3.8% of GDP for ^^*^ f ^V T y"" wy f i ffnif*fh^
reference value of 3% of GDP. Based on this prima facie evidence, the Commission initiated
the Excessive Deficit Procedure for Germany on 19 November 2002, with the adoption of the
report foreseen in Article 104.3 .of the Treaty. On 18 December 2002, the Commission
received the updated Stability Programme of Germany, which confirmed a government deficit
figure of 3 V* % of GDP for 2002. The application-of the excessive deficit procedure (EDP) is
governed by Article 104 of the Treaty (ex 104c), Council Regulation N01467/97 "on the
speeding up and clarifying the implementation of the excessive deficit procedure", which is
part of the Stability and Growth -Pact. It is also affected by the political commitments
enshrined in the Resolution of the Amsterdam European Council on the Stability and Growth
Pact of 17 June 1997.
 In an initial step of the EDP, the Commission prepared a report according to Art. 104.3 of the
 Treaty. That report was adopted by the Commission on 19 November. It concluded that in
 2002, the general government deficit in Germany was likely to reach 3.8% of GDP,
 significantly exceeding the reference value of 3%. Gross government debt was projected to
 reach 60.9% of GDP by end-2002, also rising above the respective reference value of the
 Treaty (60% of GDP). The excess of the German deficit in 2002 over the reference value did
 not result from an unusual event outside the control of the German authorities, nor was it the
 result of a severe economic downturn. On developments in 2003 the report concluded that,
 while it was clear that the deficit would be reduced, it was not yet possible to assess whether
 the deficit would come to fall below the 3% of GDP reference value. Moreover, given that the
  debt-to-GDP ratio was projected to rise to close to 62% of GDP by the end of 2003, any
  slippage in budgetary execution or a deceleration in nominal GDP growth would imply an
  additional deterioration of the debt ratio.
  Treaty Art. 104.4 states that "the Committee provided for in Article 114 (i.e. the Economic
  and Financial Committee) shall formulate an opinion on the report of the Commission". The
  Committee issued its opinion on 29 November 2002 (document EFC/ECFIN/593/02), largely
  subscribing to the Commission's Assessment. In particular, the EFC concluded that budgetary
  developments in Germany in 2002 were such that both the deficit and the debt criterion
  referred to in Article 104(2) were not respected. Consideration of other relevant factors
  supported the assessment based on these criteria. While taking note of the strong commitment
  by the German authorities to introduce all the necessary measures to correct the situation, the
  EFC, following the report by the Commission, considered that there was a risk of the general
  government deficit exceeding the Treaty's reference value again in 2003. The Committee also
  underlined that gross debt was unlikely to reverse its rising trend to comply with the Treaty's
  reference value of 60 percent of GDP.
   The Commission, having examined the relevant factors taken into account in its report and
  having regard to the opinion of the EFC, is of the opinion that an excessive deficit exists in
   Germany. This opinion, adopted by the Commission on [8 January 2003], is herewith
   addressed to the Council, according to Article 104.5 of the Treaty. The Commission
   recommends that the Council shall decide accordingly, in conformity with Article 104.6. In
   addition, the Commission is submitting to the Council a recommendation for a Council
   recommendation to be addressed to Germany with a view to bringing an end to the situation
   of an excessive government deficit, according to Treaty Article 104.7.
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                                                                           document
                                      Recommendation for a          a ete declasse
                                                                             15. 11. 2006
                                     COUNCIL DECISION
                                                                    LE:
on the existence of an excessive deficit in Germany - Application of Article 104
                          Treaty establishing the European Community
THE COUNCIL-OF THE EUROPEAN UNION
Having regard-to the Treaty establishing the European Community, and in particular Article
104(6) thereof,
Having regard to the recommendation from the Commission under article 104(6) of the
Treaty,
Having regard to the observations made by Germany,
Whereas:
(1)      In stage three of Economic and Monetary Union (EMU), according to Article 104 of
         the Treaty Member States shall avoid excessive government deficits.
(2)      The Stability and Growth Pact is based on the objective of sound government finances
         as a means of strengthening the conditions for price stability and for strong sustainable
         growth conducive to employment creation.
 (3)     The Amsterdam Resolution of the European Council on the Stability and Growth Pact
          of 17 June 1997 solemnly invites all parties, namely the Member States, the Council
          and the Commission to implement the Treaty and the Stability and Growth pact in a
          strict an timely manner.
 (4)      The excessive deficit procedure under article 104 provides for a decision on the
          existence of an excessive deficit. The Protocol on the excessive deficit procedure
          annexed to the Treaty sets out further provisions relating to the implementation of the
          excessive deficit procedure. Council Regulation (EC) 3-605/93', as last amended by
          Commission Regulation (EC) 351/20022 lays down detailed rules and definitions for
          the application of the provision of the said Protocol.
  (5)     Article 104(5) of the Treaty requires the Commission to address an opinion to the
          Council if the Commission considers that an excessive deficit in a Member State exists
          or may occur. The Commission has addressed such an opinion on Germany to the
          Council on 8 January 2003. According to this opinion:
   OJ No L332, 31.12.1993, p.7.
    OJ No L 055, 26.02.2002 p. 23.
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           Following the publication of its own Autumn forecast on 13 November 2002 which
           showed a government deficit of 3.8% of GDP in 2002 f S G e ™ the
           Comm^on m accordance with Article 104(3) of the Treaty, prepLd ^ ^ e r
                                                                                                     ember
           2002 a report on Germany which takes account of the relevanl factors;
                                          104(4) 0f the T T
           rnrm^T 7^ ^                                       ^ * * Economic and Financial
           Committee has formulated an opinion on the report of the Commission;
           Gemany has submitted an updated Stability Programme in accordance with Article 3
           of Council Regulatiorr(EC) No. 1466/97, whiclhad been a d o p S b y t e ^ e t a l
           government on 18 December 2002. According to the update, the govZmenfdefid
           m 2002 amounted to 3 %% of GDP.                                                 vemment aeticit
          The Commission considers that there exists an excessive -dcficiUn, Germany;
  (6)    icicle 104(6) of the Treaty lay* down that the Coimcil should consider anv
         observati^s which the Member State concerned may wish to m T E ^ S S ^
         decides after an overall assessment whether an excessive deficit exists;
 (7)     The overall assessment leads to the following conclusions: in the late 1990s when
                                            8 eCOn0miC                             in
         w
         wasSeT^i&th            T^f™
             linnted, with the general                  V™*-
                                        government deficit remaining*»**» at around      ^~Iti
                                                                                           1 >/2% of GDPn
         Thus, here had been little budgetary leeway to accomnLate for thetffec s 5 a
        cyclical sow do wn or for any unexpected revenue shortfalls Sm a                           toTJrl
        7GWZ^2001-.fiFrO-a              l0W
                                            <*M * ^ P in 2000, the deficit rose"                       Z
        of GDP m 2002 significantly exceeding the reference value of 3% m that vear W h ^
        general economic conditions have weakened m Germany as e sewhL L o v e r T n
        budgetary expenditure and the shortfall in revenue can only partial be e x n W d b v
        thetd o S s ^r r i' 8overnirdebt is projected *L ^n^t %
                                       eXCeedmg        Sli8htly
        of 60% of GDP                            ' ^ ^          ' * * r e s P e c t i v e -f-ence value
 HAS ADOPTED THIS DECISION:
                                            Article 1
From an overall assessment itfollow*that an excessive deficit exists in Germany.
                                            Article 2
This decision is addressed to the Federal Republic of Gemiany.
Done at Brussels, 21 January 2003.
                                                           Ce document
For the Council                                            a ete declasse
                                                                     15. 11. 2006
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