Considerations on COM(2016)297 - Abrogation of Decision 2009/416/EC on the existence of an excessive deficit in Ireland - Main contents
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dossier | COM(2016)297 - Abrogation of Decision 2009/416/EC on the existence of an excessive deficit in Ireland. |
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document | COM(2016)297 |
date | June 17, 2016 |
(2) | On 27 April 2009, in accordance with Article 104(7) TEC and Article 3(4) of Council Regulation (EC) No 1467/97 (2), the Council, on the basis of a recommendation from the Commission, addressed a recommendation to Ireland to correct the excessive deficit by 2013. That Council recommendation was made public. |
(3) | On 2 December 2009, the Council concluded that the Irish authorities had taken effective action in compliance with the Council Recommendation of 27 April 2009 but that unexpected adverse economic events with major unfavourable consequences for public finances could be considered to have occurred in Ireland after the adoption of that Recommendation. Therefore, the Council, on the basis of a recommendation from the Commission, considered that the conditions provided for in Article 3(5) of Regulation (EC) No 1467/97 had been fulfilled and adopted a new recommendation addressed to Ireland under Article 126(7) of the Treaty on the Functioning of the European Union (TFEU) with a view to bringing the excessive deficit situation to an end by 2014 (3). |
(4) | On 7 December 2010, the Council concluded that unexpected adverse economic events with major unfavourable consequences for public finances, in particular with reference to the substantial banking sector support measures that had to be implemented, had occurred in Ireland. Therefore, the Council, following a recommendation from the Commission, adopted a new recommendation addressed to Ireland under Article 126(7) TFEU, setting a 2015 deadline for the correction of the excessive deficit (4). At the same time, following the request by the Irish authorities for financial assistance from the Union, the Member States whose currency is the euro and the International Monetary Fund (IMF), the Council adopted Implementing Decision 2011/77/EU (5) on granting financial assistance to Ireland and on specific measures to restore financial stability and sustainable growth. The Memorandum of Understanding on Specific Economic Policy Conditionality between the Commission and the Irish authorities was signed on 16 December 2010. |
(5) | On 24 August 2011, the Commission concluded that Ireland had taken effective action towards correcting the excessive deficit by 2015 as recommended by the Council on 7 December 2010. |
(6) | In accordance with Article 10(2)(a) of Regulation (EU) No 472/2013 of the European Parliament and of the Council (6), Ireland was exempted from a separate reporting requirement under the excessive deficit procedure and reported in the framework of its financial assistance programme. |
(7) | In December 2013, Ireland successfully completed the EU-IMF financial assistance programme, with the vast majority of policy conditions under the programme having been met and investor confidence in the sovereign and the banking sector restored. |
(8) | In accordance with Article 4 of Protocol (No 12) on the excessive deficit procedure annexed to the Treaty on European Union and to the TFEU, the Commission provides the data for the implementation of the procedure. As part of the application of that 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 3 of Council Regulation (EC) No 479/2009 (7). |
(9) | The Council is to take a decision to abrogate a decision on the existence of an excessive deficit on the basis of notified data. Moreover, a decision on the existence of an excessive deficit is to be abrogated only if the Commission's forecasts indicate that the deficit will not exceed the Treaty reference value of 3 % of GDP over the forecast horizon (8). |
(10) | Based on data provided by the Commission (Eurostat) in accordance with Article 14 of Regulation (EC) No 479/2009, following the notification by Ireland in April 2016, the 2016 Stability Programme and the Commission's 2016 spring forecast, the following conclusions are justified:
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(11) | As from 2016, which is the year following the correction of the excessive deficit, Ireland is subject to the preventive arm of the Stability and Growth Pact and should progress towards its medium-term budgetary objective at an appropriate pace, including respecting the expenditure benchmark, and comply with the debt criterion in accordance with Article 2(1a) of Regulation (EC) No 1467/97. In that context, there appears to be a risk of some deviation from the required adjustment path towards the medium-term budgetary objective in 2016, while Ireland is projected to be compliant in 2017. Ireland is projected to be compliant with the transitional debt rule in both years. Overall, further measures will be needed in 2016. |
(12) | In accordance with Article 126(12) TFEU, 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. |
(13) | In the view of the Council, the excessive deficit in Ireland has been corrected and Decision 2009/416/EC should therefore be abrogated, |