Decision 2010/182 - 2010/182/: Council Decision of 16 February 2010 giving notice to Greece 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 83/13

In accordance with Article 126(1) of the Treaty on the Functioning of the European Union (TFEU), 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 2005 reform of the Stability and Growth Pact sought to strengthen its effectiveness and economic underpinnings as well as to safeguard the sustainability of public finances in the long run. It aimed at ensuring that, in particular, the economic and budgetary background was taken into account fully in all steps in the excessive deficit procedure. In this way, the Stability and Growth Pact provides the framework supporting government policies for a prompt return to sound budgetary positions taking account of the economic situation.

On 27 April 2009, the Council decided, in accordance with Article 104(6) of the Treaty establishing the European Community (TEC), that an excessive deficit existed in Greece and issued recommendations to correct the excessive deficit by 2010 at the latest, in accordance with Article 104(7) TEC and 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 (1). The Council also set a deadline of 27 October 2009 for effective action to be taken.

The actual and planned government deficit and debt data notified in April 2009 by Greece were substantially revised upwards in the October 2009 notification. The deficit figure for 2008 rose to 7¾ % of GDP (from the 5 % of GDP notified in April 2009), while the debt ratio is reported to have reached 99 % of GDP at the end of 2008 (as compared to 97,6 % reported in April 2009). In accordance with Article 15(1) of Council Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (2), the Commission (Eurostat) expressed a general reservation on the quality of actual data reported by Greece, due to ‘significant uncertainties’ over the figures notified by Greece. The Commission (Eurostat)’s reservation on the Greek government finance statistics has not yet been withdrawn and therefore the Greek government finance statistics have not currently been validated and are subject to further revisions. According to the Commission services’ autumn 2009 forecasts and the January 2010 update of the Greek stability programme (hereinafter ‘the January 2010 update’), the general government deficit reached 12¾ % of GDP in 2009, compared with the target of 3,7 % of GDP in the January 2009 update. On the basis of the officially projected real GDP growth rate of – ¼ % in 2010, the 2010 budgetary target stands at 8,7 % of GDP which is well above the reference value of 3 % of GDP.

On 2 December 2009, the Council established, in accordance with Article 126(8) TFEU, that Greece had taken no effective action in response to the Council Recommendation under Article 104(7) TEC of 27 April 2009 (hereinafter ‘the Council Recommendation of 27 April 2009’).

On 11 February 2010, the European Council...