Decision 2005/441 - 2005/441/EC: Council Decision of 17 February 2005 giving notice to Greece, in accordance with Article 104(9) of the EC Treaty, to take measures for the deficit reduction judged necessary in order to remedy the situation of excessive deficit - Main contents

EN

Official Journal of the European Union

L 153/29

According to Article 104(1) of the Treaty, Member States are to avoid excessive government deficits.

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. The Stability and Growth Pact includes Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (1).

The Resolution of the European Council of 17 June 1997 on the Stability and Growth Pact, Amsterdam (2) 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 and timely manner.

By Council Decision 2004/917/EC (3), on 5 July 2004, it was decided, in accordance with Article 104(6) of the Treaty, that an excessive deficit existed in Greece.

In accordance with Article 104(7) of the Treaty and Article 3(4) of Regulation (EC) No 1467/97, the Council addressed a Recommendation to Greece on 5 July 2004 establishing the deadline of 5 November 2004 for Greece to take measures to bring the existence of an excessive deficit to an end in 2005 at the latest.

After the adoption of Decision 2004/917/EC, the Greek government data notified on 4 May 2004 was significantly revised in September 2004. The deficit figure for 2003 rose to 4,6 % of GDP (from the 3,2 % notified on 4 May), while according to the Commission’s autumn 2004 forecasts, the general government deficit was likely to reach 5,5 % of GDP in 2004, compared with the 3,2 % projected in spring. Furthermore, the measures approved by the Greek Parliament in the 2005 budget might not ensure that the general government deficit is brought below 3 % of GDP in 2005. According to the Commission’s autumn 2004 forecasts, which projected a growth rate of 3,3 % in 2005, the measures included in the Greek budget for 2005 are projected to lead to a nominal deficit of 3,6 % of GDP, which is above the 3 % threshold.

By Council Decision 2005/334/EC (4), it was established, in accordance with Article 104(8) of the Treaty, that Greece had not taken effective action in response to the Council Recommendation according to Article 104(7) of 5 July 2004.

According to Article 104(9), if a Member State persists in failing to put into practice the recommendations of the Council, the Council may decide to give notice to the Member State to take measures for the deficit reduction within a specified time-limit. The Council considers that the deadline, set in the Council Recommendation according to Article 104(7) of 5 July 2004, based on the present Commission forecast will not be met. Article 5 of Regulation (EC) No 1467/97 indicates that any Council decision to give such notice is to be taken within one month of the Council decision establishing that the Member State in question has not taken effective action in accordance with Article 104(8).

The following factors should be taken into account in determining the recommendations to be included in the notice. Firstly, the estimated deficit out-turn for 2004 will be substantially...