Regulation 2013/473 - Common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area - Main contents

Fiscal surveillance and excessive deficit correction in the euro area

SUMMARY OF:

Assessing euro area countries’ draft budgetary plans and ensuring the correction of excessive deficits — Regulation (EU) No 473/2013

SUMMARY

WHAT DOES THIS REGULATION DO?

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  It is designed to improve the surveillance of budgetary policies in euro area countries through, for instance, a coordinated assessment of their draft budgets by the European Commission every autumn.
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  It introduces a European assessment of draft budgetary plans on a coordinated time frame in autumn for euro area countries.
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  It improves national budgetary frameworks by requiring the creation of independent bodies.

KEY POINTS

Scope

The regulation applies to all euro area countries, with special rules for those subject to an excessive deficit procedure (EDP).

The EDP comprises a set of rules designed to bring the deficit below the 3 % gross domestic product target defined in Article 126 of the Treaty on the Functioning of the European Union and in the context of the stability and growth pact (SGP). A country is in deficit for a given year when its spending for that year is greater than its revenue.

Common timeline

The new common budgetary rules include a common budgetary timeline according to which all euro area countries submit their draft budgetary plans by 15 October, i.e. before the final adoption by national parliaments. The Commission issues an opinion in light of compliance with the SGP requirements. If the plan is found to be in breach of the common budgetary rules, the Commission may ask the country concerned to send in a revised draft plan within 3 weeks of its opinion. The Commission’s request will be reasoned and made public. The Commission’s opinion is not binding and national parliaments retain full sovereignty.

In 2013, the Commission issued a communication outlining the specifications for draft budgetary plans and debt issuance reports. It subsequently amended these specifications in a further paper in 2014, so as to provide greater clarification.

Compliance and forecasting

The regulation requires euro area countries to put in place independent bodies in charge of monitoring compliance with the relevant fiscal rules and to produce or endorse the macroeconomic forecasts underpinning the annual budget and the medium-term fiscal plans.

Reporting

Lastly, euro area countries in an EDP are subject to more stringent reporting requirements. The regulation gives the Commission a new tool to react more quickly when the EDP requirements are at risk by issuing a warning.

FROM WHEN DOES THIS REGULATION APPLY?

It applies from 30 May 2013.

BACKGROUND

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  Draft budgetary plans of euro area Member States on the European Commission’s website
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  The corrective arm on the European Commission’s website

ACT

Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area (OJ L 140, 27.5.2013, pp. 11–23)

RELATED ACT

Commission Delegated Regulation (EU) No 877/2013 of 27 June 2013 supplementing Regulation (EU) No 473/2013 of the European Parliament and of the Council on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area (OJ L 244, 13.9.2013, pp. 23–31).

Communication from the Commission: Harmonized framework for draft budgetary plans and debt issuance reports within the euro area (COM(2013) 490 final of 27.6.2013)

Communication from the Commission replacing the Communication from the Commission on Harmonized framework for draft budgetary plans and debt issuance reports within the euro area (COM(2014) 675 final of 28.10.2014)

last update 22.02.2016

This summary has been adopted from EUR-Lex.