Commission publishes Excessive Debt Procedure report on Belgium, Cyprus, Hungary, Malta and Poland

This is the first time the European Commission has applied the new rules of the strengthened Stability and Growth Pact (SGP), the so-called "six-pack" rules, which entered into force on 13 December 2011.

Background

The Excessive Deficit Procedure (EDP) is a mechanism established in the EU treaties (Article 126) with the aim to ensure that Member States correct gross fiscal policy errors. There are two key reference values: one for the general government deficit (3% of GDP) and one for gross government debt (60% of GDP). The various steps under the EDP are listed in the Treaty and further specified in the Stability and Growth Pact (SGP) legislation, which was recently in the center of a substantial reform reinforcing economic surveillance including the EU fiscal framework: On 13 December 2011 a new set of rules entered into force. It is often referred to as "six-pack", as it consists of five regulations and one directive (see MEMO/11/898   for more details).

The new rules affect both the preventive arm of the SGP - the procedures to promote surveillance and coordination of economic policies and ensure that excessive deficits are avoided - and the corrective arm of the pact, the EDP. New enforcement mechanisms, including in particular financial disincentives and fines, were drawn up for non-compliant euro-area Member States in order to render the SGP more dissuasive.

Currently, 23 out of the 27 EU Member States (all but Estonia, Finland, Luxemburg and Sweden) are subject to an EDP. Thus the new rules on the corrective arm of the SGP are of particular importance.

Documents

• Press release - 11 January 2012 - Belgium, Cyprus, Malta and Poland took effective action to correct deficit while Hungary's measures are insufficient  
• Memo - 11 January 2012 - Excessive Deficit Procedure (EDP): Five Member States assessed  
• COMMUNICATION FROM THE COMMISSION TO THE COUNCIL - Assessment of budgetary implementation in the context of the ongoing Excessive Deficit Procedures after the Commission Services' 2011 Autumn Forecast(61 kB)  
• COMMISSION STAFF WORKING DOCUMENT- Analysis by the Commission services of the budgetary situation in Belgium(61 kB)  
• COMMISSION STAFF WORKING DOCUMENT- Analysis by the Commission services of the budgetary situation in Cyprus(63 kB)  
• COMMISSION STAFF WORKING DOCUMENT- Analysis by the Commission services of the budgetary situation in Hungary(94 kB)  
• COMMISSION STAFF WORKING DOCUMENT- Analysis by the Commission services of the budgetary situation in Malta(51 kB)  
• COMMISSION STAFF WORKING DOCUMENT- Analysis by the Commission services of the budgetary situation in Poland(52 kB)  
• Recommendation for a COUNCIL DECISION Establishing that no effective action has been taken by Hungary in response to the Council Recommendation of 7 July 2009(24 kB)