Decision 2005/135 - 2005/135/EC: Council Decision of 11 May 2004 abrogating the decision on the existence of an excessive deficit in Portugal

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Contents

  1. Current status
  2. Key information
  3. Key dates
  4. Legislative text
  5. Original proposal
  6. Sources and disclaimer
  7. Full version
  8. EU Monitor

1.

Current status

This decision has been published on February 18, 2005.

2.

Key information

official title

2005/135/EC: Council Decision of 11 May 2004 abrogating the decision on the existence of an excessive deficit in Portugal
 
Legal instrument Decision
Number legal act Decision 2005/135
Original proposal SEC(2004)497 EN
CELEX number i 32005D0135

3.

Key dates

Document 11-05-2004
Publication in Official Journal 18-02-2005; OJ L 47 p. 24-25
Effect 02-02-1002; Entry into force Date notif.
End of validity 31-12-9999

4.

Legislative text

18.2.2005   

EN

Official Journal of the European Union

L 47/24
 

COUNCIL DECISION

of 11 May 2004

abrogating the decision on the existence of an excessive deficit in Portugal

(2005/135/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 104(12) thereof,

Having regard to the recommendation from the Commission,

Whereas:

 

(1)

By Council Decision 2002/923/EC (1), following a recommendation from the Commission in accordance with Article 104(6) of the Treaty, it was decided that an excessive deficit existed in Portugal.
 

(2)

In accordance with Article 104(7) of the Treaty, the Council made a Recommendation addressed to Portugal with a view to bringing the excessive deficit situation to an end (2). That Recommendation, in conjunction with Article 3(4) of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit, procedure (3), established a deadline for the correction of the excessive deficit, which should be completed in the year following its identification, i.e. 2003 at the latest.
 

(3)

In accordance with Article 104(12) of the Treaty, 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.
 

(4)

The definitions of ‘government’ and ‘deficit’ are laid down in the Protocol on the excessive deficit procedure by reference to the European System of Integrated Economic Accounts (ESA), second edition. The data for the excessive deficit procedure are provided by the Commission.
 

(5)

Based on the data provided by the Commission after reporting by Portugal before 1 March 2004 in accordance with Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (4), and on the Commission Spring 2004 forecast, the following conclusions are warranted:

 

—

The general government deficit is estimated at 2,8 % of GDP in 2003, compared with 2,7 % in 2002 and 4,4 % in 2001. The outcome for 2003 complied with the Council Recommendation issued under Article 104(7), particularly as regards the reduction of the government deficit below the reference value of 3 % of GDP by 2003 at the latest. Fiscal adjustment was pursued in 2003 on the back of a sustained deceleration in the pace of total current primary expenditure growth from 8,9 % in 2001 to 7,8 % in 2002 and 4,1 % in 2003. However, the current cyclical downturn, which ended in a recession in 2003, led to a significant deviation of 2,6 percentage points between the GDP growth outcome for the year and the initial budgetary projection. As a result, a massive shortfall in tax revenue developed during 2003, which had to be offset by the adoption of two one-off measures, together worth 2,1 % of GDP.
 

—

The structural measures taken by the Portuguese authorities, having a more direct impact on public finances, fall mainly on three areas: (i) public administration; (ii) the healthcare sector; and (iii) education. In particular, the quasi-freeze of wage scales and employment in the civil service in the period 2003-2004 is expected to have favourable base effects in the future, thereby having a significant structural impact. In addition, the Portuguese authorities estimate that the ongoing comprehensive reform in the healthcare sector has already had, in 2003, some positive effects on both expenditure savings and productivity gains.
 

—

The Commission 2004 Spring forecast projects a general government deficit of 3,4 % of GDP for 2004, thereby significantly above the official target of a deficit of 2,8 % of GDP. The...


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This text has been adopted from EUR-Lex.

5.

Original proposal

 

6.

Sources and disclaimer

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7.

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8.

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