Legal provisions of COM(2023)240 - Effective coordination of economic policies and multilateral budgetary surveillance - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)240 - Effective coordination of economic policies and multilateral budgetary surveillance. |
|---|---|
| document | COM(2023)240 |
| date | April 29, 2024 |
CHAPTER I
SUBJECT-MATTER AND DEFINITIONS
Article 1
Subject-matter
This Regulation sets out rules ensuring effective coordination of economic policies of the Member States, thereby supporting the achievement of the Union’s objectives for growth and employment.
It lays down detailed rules concerning the content, submission, assessment and monitoring of national medium-term fiscal-structural plans as part of multilateral budgetary surveillance by the Council and the Commission so as to promote debt sustainability and sustainable and inclusive growth in the Member States and prevent the occurrence of excessive government deficits, by medium-term planning.
Article 2
Definitions
For the purposes of this Regulation, the following definitions apply:
1. ‘country-specific recommendation’ means the annual guidance by the Council to a Member State on economic, budgetary, employment and structural policies in accordance with Articles 121 and 148 of the Treaty on the Functioning of the European Union (TFEU);
1. ‘net expenditure’ means government expenditure net of interest expenditure, discretionary revenue measures and other budgetary variables outside the control of the government as set out in Annex II, point (a);
2. ‘technical trajectory’ means the net expenditure trajectory put forward by the Commission to provide guidance to Member States with public debt above the 60% of gross domestic product (GDP) reference value or government deficit above the 3% of GDP reference value when drawing up their national medium-term fiscal-structural plans;
3. ‘net expenditure path’ means the multi-annual trajectory for net expenditure of a Member State as set by the Council;
4. ‘national medium-term fiscal-structural plan’ means the document containing the fiscal, reform and investment commitments of a Member State;
5. ‘annual progress report’ means the document of a Member State reporting on the implementation of the net expenditure path, and of the reforms and investment commitments included in its national medium-term fiscal-structural plan;
6. ‘adjustment period’ means the period of time over which the fiscal adjustment of a Member State takes place, covering a minimum adjustment period of 4 years of the national medium-term fiscal-structural plan and its possible extension;
7. ‘control account’ means a record of the cumulated deviations of the actual net expenditure in a Member State from the net expenditure path;
8. ‘structural balance’ means the cyclically adjusted general government balance net of temporary measures;
9. ‘structural primary balance’ means the cyclically adjusted general government balance net of temporary measures and net of interest expenditure.
CHAPTER II
EUROPEAN SEMESTER
Article 3
The European Semester
In order to ensure closer coordination of economic policies and sustained convergence of the economic and social performance of the Member States, the Council and the Commission shall conduct multilateral surveillance within the European Semester in accordance with the objectives and requirements set out in the TFEU. Multilateral surveillance shall rely on high quality and independent statistics, produced in accordance with the principles laid down in Regulation (EC) No 223/2009 of the European Parliament and of the Council.
The European Semester shall include:
a. the formulation, and the surveillance of the implementation, of the broad guidelines for the economic policies of the Member States and of the Union in accordance with Article 121(2) TFEU, of country-specific recommendations and of the recommendation on the economic policy of the euro area;
b. the formulation, and the surveillance of the implementation, of the employment guidelines that are to be taken into account by Member States in accordance with Article 148(2) TFEU, including the European Pillar of Social Rights, and of the related country-specific recommendations;
c. the submission, assessment and endorsement of Member States’ medium-term fiscal-structural plans, as well as their monitoring via the annual progress reports;
d. the surveillance to prevent and correct macroeconomic imbalances pursuant to Regulation (EU) No 1176/2011;
e. other multilateral surveillance procedures established by the European Parliament and the Council pursuant to Article 121(6) TFEU.
Article 4
Implementation of the European Semester
1. Where necessary, following the assessment pursuant to this Regulation of the medium-term fiscal-structural plans, the annual progress reports and the socio-economic situation of the Member States concerned, the Council shall, on the basis of recommendations from the Commission, address recommendations to those Member States making full use of the legal instruments provided in Articles 121 and 148 TFEU and related secondary legislation.
2. Member States shall take due account of the broad guidelines for the economic policies of the Member States, of the employment guidelines and of the recommendations referred to in Article 3, second paragraph, points (a) and (b) before taking key decisions in the development of their economic, employment and budgetary policies. Progress shall be monitored by the Commission.
3. Failure by a Member State to act upon the guidance received may result in:
a. further country-specific recommendations;
b. a warning by the Commission or a recommendation by the Council pursuant to Article 121(4) TFEU;
c. measures under this Regulation, Council Regulation (EC) No 1467/9731 or Regulation (EU) No 1176/2011.
CHAPTER III
THE TECHNICAL TRAJECTORY
Article 5
Technical trajectory
For each Member State having a public debt above the 60% of GDP reference value or a government deficit above the 3% of GDP reference value, the Commission shall put forward, in a report to the Economic and Financial Committee, a technical trajectory for net expenditure covering a minimum adjustment period of 4 years of the national medium-term fiscal-structural plan, and its possible extension by a maximum of 3 years pursuant to Article 13. The Commission shall make the report public.
Article 6
Requirements for the technical trajectory
The technical trajectory shall ensure that:
(a) the public debt ratio is put or remains on a plausibly downward path, or stays at prudent levels;
(b) the government deficit is brought and maintained below the 3% of GDP reference value;
(c) the fiscal adjustment effort over the period of the national medium-term fiscal-structural plan is at least proportional to the total effort over the entire adjustment period;
(d) the public debt ratio at the end of the planning horizon is below the public debt ratio in the year before the start of the technical trajectory; and
(e) national net expenditure growth remains below medium-term output growth, on average, as a rule over the horizon of the plan.
The technical trajectories shall be differentiated for each Member State. The criteria for setting the technical trajectories are set out in Annex I.
Article 7
Prior guidance by the Commission
1. By [1 March] of the year [xxxx] in which the Member States have to submit for the first time their medium-term fiscal-structural plans or, as appropriate, within 3 weeks from the request of the Member State to submit a new plan, the Commission shall publish:
a. the underlying medium-term public debt projection framework and results;
b. its macroeconomic forecast and assumptions;
c. the technical trajectory, if required under Article 5, and the corresponding structural primary balance.
2. For Member States having a government deficit below the 3% of GDP reference value and public debt below the 60% of GDP reference value, the Commission shall provide technical information regarding the structural primary balance necessary to ensure that the headline deficit is maintained below the 3% of GDP reference value without any additional policy measures over a 10-year period after the end of the national medium-term fiscal-structural plan.
3. The Commission shall update the technical trajectories and the quantitative guidance at least once every 4 years in time for the submission of the next cycle of medium-term fiscal-structural plans.
Article 8
Assessment of plausibility
To assess plausibility that the projected public debt ratio of the Member State concerned is on a downward path or remains at a prudent level, the Commission shall use the methodology referred to in Annex V. The Commission shall make public its analysis of plausibility and the underlying data.
CHAPTER IV
NATIONAL MEDIUM-TERM FISCAL-STRUCTURAL PLANS
Article 9
Submission of the national medium-term fiscal-structural plans
Each Member State shall submit to the Council and to the Commission a national medium-term fiscal-structural plan before end-April following the entry into force of this Regulation. The Member State concerned and the Commission may agree to extend this deadline by a reasonable period if necessary.
The Member State shall make its national medium-term fiscal-structural plan public.
Article 10
Technical dialogue
Prior to the submission of its national medium-term fiscal-structural plan, the Member State concerned shall hold with the Commission a technical dialogue, with the objective of ensuring that the national medium-term fiscal-structural plan complies with Articles 11, 12 and 14.
Article 11
Content of the national medium-term fiscal-structural plan
1. The national medium-term fiscal-structural plan shall provide the information listed in Annex II. In particular, it shall present a net expenditure trajectory covering a period of at least 4 years, as well as the underlying macroeconomic assumptions and the planned fiscal-structural measures in order to demonstrate compliance with the requirements of Article 12.
The national medium-term fiscal-structural plan shall also describe the actions of the Member State concerned to address the country-specific recommendations, including those that are relevant for the Macroeconomic Imbalances Procedure, and the warnings by the Commission, where applicable, or the recommendations by the Council, where applicable, made pursuant to Article 121(4) TFEU.
2. Where the national-medium-term fiscal-structural plan includes a higher net expenditure trajectory than in the technical trajectory issued by the Commission pursuant to Article 5, the Member State shall provide in its plan sound and verifiable economic arguments explaining the difference.
Article 12
Requirements
The national medium-term fiscal-structural plan shall:
a. ensure the fiscal adjustment necessary to put or keep public debt on a plausibly downward path by the end of the adjustment period at the latest, or remain at prudent levels, and to bring and maintain the government deficit below the 3% of GDP reference value over the medium term;
b. explain how it will ensure the delivery of investment and reforms responding to the main challenges identified within the European Semester, in the country-specific recommendations, correct the identified macroeconomic imbalances under the Macroeconomic Imbalances Procedure if applicable, and address the common priorities of the Union referred to in Annex VI of this Regulation, including the European Green Deal, European Pillar of Social Rights and the Digital Decade while being consistent with the updated National Energy and Climate Plans and the National Digital Decade Roadmaps;
c. if applicable, explain how it will ensure the delivery of a relevant set of reforms and investments referred to in Article 13, underpinning an extension of the Member State’s adjustment period by 3 years at most;
d. explain how it will ensure consistency with the Recovery and Resilience Plan of the Member State concerned during the period of availability of the Recovery and Resilience Facility in accordance with Regulation (EU) 2021/241.
Article 13
Conditions for an extension of the adjustment period
1. Where a Member State commits to a relevant set of reforms and investments in accordance with the criteria set out in paragraph 2, the adjustment period may be extended by 3 years at most.
2. The set of reform and investment commitments underpinning an extension of the adjustment period, shall be commensurate with the degree of public debt challenges and challenges to medium-term growth in the Member State concerned.
The set of reforms and investment commitments shall fulfil, taken altogether, the following criteria:
(i) be growth enhancing;
(ii) support fiscal sustainability;
(iii) address the common priorities of the Union referred to in Annex VI;
(iv) address relevant country-specific recommendations addressed to the Member State concerned, including, where applicable, recommendations issued under the Macroeconomic Imbalances Procedure;
(v) ensure that the overall level of nationally financed public investment over the lifetime of the national medium-term fiscal-structural plan is higher than the medium-term level before the period of that plan.
3. Each of the reform and investment commitments underpinning an extension of the adjustment period shall be sufficiently detailed, front-loaded, time-bound and verifiable.
4. During the lifetime of the Recovery and Resilience Facility, in accordance with Regulation (EU) 2021/241, commitments included in the approved Recovery and Resilience Plan of the Member State concerned can be taken into account for an extension of the adjustment period.
5. The assessment of whether the set of reforms and investment commitments fulfil the criteria set out in paragraph 2 and of whether each of the reform and investment commitment fulfil the conditions set out in paragraph 3 shall be carried out in accordance with the assessment framework set out in Annex VII.
Article 14
Revised national medium-term fiscal-structural plan
1. A Member State may request to submit a revised national medium-term fiscal-structural plan to the Commission before the end of its adjustment period if there are objective circumstances preventing the implementation of the original national medium-term fiscal-structural plan or if the submission of a new national medium-term fiscal-structural plan is requested by a new government.
2. Prior to the submission of the revised national medium-term fiscal-structural plan, the Commission shall put forward, in a report to the Economic and Financial Committee, a new technical trajectory.
3. Taking into account the past adjustment of the Member State concerned or the lack thereof, the new technical trajectory shall not allow backloading of the fiscal adjustment effort and shall not lead to a lower fiscal adjustment effort.
4. Where a revised national medium-term fiscal-structural plan is submitted, Articles 12 and 15 to 19 shall apply.
5. The Commission shall in particular assess, if applicable, whether any extension of the adjustment period is to continue to apply under the revised national medium-term fiscal-structural plan, taking into account the implementation of the set of reform and investment commitments underpinning the extension under the original plan and the changes in terms of public debt challenges under the revised national medium-term fiscal-structural plan.
Article 15
Assessment of national medium-term fiscal-structural plans by the Commission
1. The Commission shall assess each national medium-term fiscal-structural plan within 2 months of its submission. The Member State concerned and the Commission may agree to extend the period of assessment by a reasonable period if necessary.
2. When assessing the national medium-term fiscal-structural plan the Commission shall examine for all Member States:
(a) whether the national medium-term fiscal-structural plan ensures that public debt is put or kept on a plausibly downward path by the end of the adjustment period at the latest, or stays at prudent levels;
(b) whether the government deficit is maintained below the 3% of GDP reference value throughout the duration of the plan or whether the government deficit returns swiftly below the 3% of GDP reference value at the latest by the end of the adjustment period when the deficit is above this reference value at the time of submission of the national medium-term fiscal-structural plan;
(c) whether the government deficit is maintained below the 3% of GDP reference value in the absence of further budgetary measures over a period of 10 years;
(d) whether the fiscal adjustment effort over the period of the national medium-term fiscal-structural plan is at least proportional to the total effort over the entire adjustment period;
(e) whether for the years that the Member State concerned is expected to have a deficit above the 3% of GDP reference value, and the excess is not close and temporary, the fiscal adjustment is consistent with the benchmark referred to under Article 3 of Council Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure as amended by Regulation [X]; and
(f) whether the public debt ratio at the end of the planning horizon is below the public debt ratio in the year before the start of the technical trajectory.
3. In addition the Commission shall examine for the Member State concerned:
(a) whether the set of reform and investment commitments underpinning an extension of the adjustment period fulfil the conditions set out in Article 13;
(b) whether the other reform and investment commitments contained in the plan comply with the requirements of Article 12, letter b.
Article 16
Endorsement of the national medium-term fiscal-structural plan by the Council
The Council, on a recommendation from the Commission, shall adopt a recommendation setting the net expenditure path of the Member State concerned and, if applicable, endorsing the set of reform and investment commitments underpinning an extension of the adjustment period included in its national medium-term fiscal-structural plan within four weeks of the adoption of the Commission recommendation as a rule.
Where the national medium-term fiscal-structural plan serves as the corrective action plan required for the correction of excessive macroeconomic imbalances, as provided for in Article 30, the Council shall also endorse in that recommendation the reforms and investment necessary to correct the imbalances.
Article 17
Council Recommendation for a revised national medium-term fiscal-structural plan
Where it considers that the plan does not comply with the requirements set out in Article 15 (2) and (3) point (a), the Council shall, on a recommendation from the Commission, recommend that the Member State concerned submits a revised national medium-term fiscal-structural plan.
Article 18
Council Recommendation in case of failure by the Member State
The Council shall, on a recommendation from the Commission, recommend to the Member State concerned that the technical trajectory issued by the Commission be the net expenditure path of the Member State where:
a. the Member State concerned fails to submit a revised national medium-term fiscal-structural plan within one month of the recommendation by the Council;
b. the Council considers that the revised national medium-term fiscal-structural plan does not comply with the requirements set out in Article 15(2) and (3), point (a);
c. the Member State fails to submit a new national medium-term fiscal-structural plan at the end of the period covered by the previous national medium-term fiscal-structural plan.
Article 19
Failure by a Member State to satisfactorily comply with its commitments underpinning an extension of its adjustment period
Where a Member State has been granted an extension of its adjustment period but fails to satisfactorily comply with its set of reform and investment commitments underpinning the extension referred to in Article 13(1), the Council may on a recommendation from the Commission, recommend a revised net expenditure path with a shorter adjustment period.
CHAPTER V
IMPLEMENTATION OF THE NATIONAL MEDIUM-TERM FISCAL-STRUCTURAL PLANS
Article 20
Progress report
1. Each Member State shall submit to the Commission an annual progress report on the implementation of its national medium-term fiscal-structural plan, by 15 April each year at the latest.
2. The annual progress report referred to in paragraph 1 shall contain in particular information about the progress in the implementation of the net expenditure path, the implementation of broader reform and investment commitments in the European Semester context and, if applicable, in the implementation of the set of reform and investment commitments underpinning an extension of the adjustment period.
3. The annual progress report referred to in paragraph 1 shall also contain the information set out in Annex III.
4. Each Member State shall make its annual progress report public.
Article 21
Monitoring by the Commission
The Commission shall monitor the implementation of the national medium-term fiscal-structural plan, and in particular, the net expenditure path.
The Commission shall set up a control account, functioning in accordance with Annex IV, and shall keep track of cumulative upward and downward deviations of actual net expenditures from the net expenditure path.
Article 22
Role of independent fiscal institutions
Each national independent fiscal institution referred to in Article 8 of Council Directive […] [on the national budgetary frameworks] shall provide an assessment of compliance of the budgetary outturns data reported in the progress report referred to in Article 20 with the net expenditure path. Where applicable, each national independent fiscal institution shall also analyse the factors underlying a deviation from the net expenditure path.
Article 23
Commission warning and Council recommendation for policy measures
1. In the event of a significant risk of deviation from the net expenditure path or a risk that the government deficit may exceed the 3% of GDP reference value, the Commission may address a warning to the Member State concerned in accordance with Article 121(4) TFEU.
2. On the basis of a Commission recommendation, the Council shall, within one month of the Commission warning referred to in paragraph 1, adopt a recommendation to the Member State concerned for the necessary policy measures, in accordance with Article 121(4) TFEU.
Article 24
Severe economic downturn in the euro area or the Union as a whole
On a recommendation from the Commission, the Council may adopt a recommendation allowing Member States to deviate from their net expenditure path, in the event of a severe economic downturn in the euro area or the Union as a whole, provided it does not endanger fiscal sustainability in the medium term. The Council shall specify a time-limit for such deviation.
As long as the severe economic downturn in the euro area or the Union as a whole persists, the Commission shall continue to monitor debt sustainability and ensure policy coordination and a consistent policy mix that takes into account the euro area and the Union dimension.
The Council, on a recommendation from the Commission, may extend the period during which Member States may deviate from the net expenditure paths, provided that the severe economic downturn in the euro area or the Union as a whole persists. An extension may be granted more than once. However, each extension shall be for an additional period of one year at most.
Article 25
Exceptional circumstances outside the control of the Member State leading to a major impact on the public finances of the Member State concerned
On a recommendation from the Commission, the Council may adopt a recommendation allowing a Member State to deviate from its net expenditure path where exceptional circumstances outside the control of the Member State lead to a major impact on the public finances of the Member State concerned, provided it does not endanger fiscal sustainability in the medium term. The Council shall specify a time-limit for such a deviation.
The Council, on a recommendation from the Commission, may extend the period during which the Member State may deviate from the net expenditure path, provided that the exceptional circumstances persist. An extension may be granted more than once. However, each extension shall be for an additional period of one year at most.
CHAPTER VI
ECONOMIC DIALOGUE
Article 26
European Semester Dialogue
The European Parliament shall be duly involved in the European Semester in order to increase the transparency and ownership of, and the accountability for the decisions taken, in particular by means of an economic dialogue. The Economic and Financial Committee, the Economic Policy Committee, the Employment Committee and the Social Protection Committee shall be consulted within the framework of the European Semester where appropriate. Relevant stakeholders, in particular the social partners, shall be involved within the framework of the European Semester, on the main policy issues where appropriate, in accordance with the provisions of the TFEU and national legal and political arrangements.
In order to enhance the dialogue between the institutions of the Union, in particular the European Parliament, the Council and the Commission, and to ensure transparency and accountability, the European Parliament may invite the President of the Council, the Commission and, where appropriate, the President of the European Council or the President of the Eurogroup to appear before it to discuss the policy guidance to Member States issued by the Commission, conclusions drawn by the European Council and the results of multilateral surveillance carried out under this Regulation.
The President of the Council, and the Commission in accordance with Article 121 TFEU, and, where appropriate, the President of the Eurogroup, shall report annually to the European Parliament and to the European Council on the results of the multilateral surveillance.
Article 27
Comply or explain rule
The Council is expected to, as a rule, follow the recommendations and proposals of the Commission or explain its position publicly.
Article 28
Dialogue with a Member State
Where the Council addresses a recommendation to a Member State pursuant to Article 23(2) in the event of a significant risk of deviation from the net expenditure path, the European Parliament may offer the opportunity to that Member State, to participate in an exchange of views.
Article 29
Regular information of the European Parliament
1. The Council and the Commission shall regularly inform the European Parliament of the application of this Regulation.
2. The Council and the Commission shall include in their report to the European Parliament the results of the multilateral surveillance carried out pursuant to this Regulation.
CHAPTER VII
INTERACTION WITH REGULATION (EU) No 1176/2011
Article 30
Interaction with the Macro-Economic Imbalance Procedure
1. Where a Member State fails to implement the reform and investment commitments included in its national medium-term fiscal-structural plan to address the country-specific recommendations that are relevant for the Macroeconomic Imbalance Procedure established by Regulation (EU) No 1176/2011, and where the Commission considers that the Member State concerned is affected by excessive imbalances in accordance with Article 7(1) of that Regulation, the procedure laid down in Article 7(2) of Regulation (EU) No 1176/2011 shall apply.
2. In that case, the Member State for which an excessive imbalance procedure is opened in accordance with Article 7(2) of Regulation (EU) No 1176/2011, it shall submit a revised plan in accordance with Article 14 of this Regulation. The revised plan shall follow the Council recommendation adopted in accordance with Article 7(2) of Regulation (EU) No 1176/2011. The submission of the revised plan shall be subject to the endorsement by the Council in accordance with Articles 16 to 19 of this Regulation. The revised plan shall be assessed in accordance with Article 15 of this Regulation.
3. Where a Member State submits a revised medium-term fiscal-structural plan pursuant to paragraph 2, that revised plan shall serve as the corrective action plan required under Article 8(1) of Regulation (EU) No 1176/2011 and shall set out the specific policy actions the Member State concerned has implemented or intends to implement and shall include a timetable for those actions.
In that case, in accordance with Article 8(2) of Regulation (EU) No 1176/2011, the Council, on the basis of a Commission assessment, shall assess the revised plan within 2 months of its submission. The monitoring and assessment of the implementation of the revised plan shall be made in accordance with Article 21 of this Regulation and Articles 9 and 10 of Regulation (EU) No 1176/2011.
CHAPTER VIII
INTERACTION WITH REGULATION (EU) No 472/2013
Article 31
Interaction with the enhanced surveillance procedure
A Member State subject to enhanced surveillance under Article 2 of Regulation (EU) No 472/2013 of the European Parliament and of the Council32 shall take into account any recommendations addressed to it under Article 23 of this Regulation when adopting measures aimed at addressing the sources or potential sources of difficulties pursuant to Article 3(1) of that Regulation.
Where a Member State is subject to a macroeconomic adjustment programme and the changes thereto in accordance with Article 7 of Regulation (EU) No 472/2013, it shall not be required to submit a medium-term fiscal-structural plan pursuant to Article 9 of this Regulation and an annual progress report pursuant to Article 20 of this Regulation.
CHAPTER IX
DELEGATED POWERS
Article 32
Amendment of the annexes
The Commission is empowered to adopt delegated acts in accordance with Article 33 to amend Annexes II to VII to adapt them to take due account of further developments or needs regarding the information in the national medium-term fiscal-structural plan (Annex II) or in the annual progress reports (Annex III), regarding the functioning of the control account (Annex IV), regarding the methodology for the assessment of plausibility (Annex V), regarding the common priorities of the Union (Annex VI) or regarding the assessment framework (Annex VII).
Article 33
Exercise of the delegation
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.
2. The power to adopt delegated acts referred to in Article 32 shall be conferred for an indeterminate period of time from XXX.
3. The delegations of power referred to in Article 32 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect on the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.
4. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.
5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.
6. A delegated act adopted pursuant to Article 32 shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of one month of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by one month at the initiative of the European Parliament or of the Council.
CHAPTER X
COMMON PROVISIONS
Article 34
Dialogue with the Member States
The Commission shall ensure a permanent dialogue with Member States in accordance with the objectives of this Regulation. To that end, the Commission shall, in particular, carry out missions for the purpose of the assessment of the socio-economic situation in the Member State and the identification of any risks or difficulties in complying with the objectives of this Regulation.
Article 35
In-depth surveillance missions
1. The Commission may undertake in-depth surveillance missions in Member States which are the subject of recommendations issued pursuant to Article 23 for the purposes of on-site monitoring.
2. When the Member State concerned is a Member State whose currency is the euro or a Member State that is participating in ERM2, the Commission may invite representatives of the European Central Bank, if appropriate, to participate in surveillance missions.
Article 36
Report
1. By [31 December 2030] and every 5 years thereafter, the Commission shall submit to the European Parliament and to the Council a report on the application of this Regulation accompanied, where appropriate, by a proposal to amend this Regulation. The Commission shall make that report public.
2. The report referred to in paragraph 1 shall review:
a. the effectiveness of this Regulation, particularly whether the provisions governing decision-making have proved sufficiently efficient in ensuring a downward path for public debt ratios or maintaining them at prudent levels in accordance with the relevant Council recommendations;
b. the progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member States.
3. The report shall be forwarded to the European Parliament and the Council.
Article 37
Repeal of Regulation (EC) No 1466/97
Regulation (EC) No 1466/97 is repealed.
Article 38
Entry into force
This Regulation shall enter into force on the [twentieth] day following that of its publication in the Official Journal of the European Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.