Decision 2006/344 - 2006/344/EC: Council Decision of 14 March 2006 giving notice to Germany, in accordance with Article 104(9) of the Treaty establishing the EC, 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 126/20

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 Amsterdam European Council of 17 June 1997 on the Stability and Growth Pact (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 Decision 2003/89/EC (3), the Council decided, in accordance with Article 104(6) of the Treaty, that an excessive deficit existed in Germany.

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 Germany on 21 January 2003, calling on Germany to bring the excessive deficit to an end as rapidly as possible and by 2004 at the latest. The recommendation was made public. As stated in the Commission Communication of 14 December 2004, with which the Council concurred on 18 January 2005, in view of the unique circumstances created by the Council conclusions of 25 November 2003 and of the ruling of the European Court of Justice of 13 July 2004, the year 2005 should be considered to be the relevant deadline for the correction of the excessive deficit.

The general government deficit in Germany has been well above the 3 %-of-GDP Treaty reference value since 2002. The debt-to-GDP ratio has increased from below the 60 % of GDP Treaty reference value in 2001 to a projected 69 % of GDP in 2006.

According to data provided by Eurostat, the general government deficit in Germany amounted to 3,3 % of GDP in 2005. These data, pending a further assessment of their quality, are based upon a provisional notification from Germany pursuant to 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), submitted to the Commission on 24 February 2006. Additionally, on the basis of information currently available, taking into account the budgetary plans adopted so far by the German government, the general government deficit will also remain above the Treaty reference value in 2006, which confirms that the excessive deficit has not been corrected.

According to Article 10(3) of Regulation (EC) No 1467/97, if actual data pursuant to Regulation (EC) No 3605/93 indicate that an excessive deficit has not been corrected by a participating Member State within the time limits specified in a recommendation issued under Article 104(7) of the Treaty, the Council shall immediately take a decision under Article 104(9) of the Treaty giving notice to the Member State to take, within a specified time limit, measures for the deficit reduction which is judged necessary by...