Decision 2013/315 - 2013/315/EU: Council Decision of 21 June 2013 abrogating Decision 2004/918/EC on the existence of an excessive deficit in Hungary - Main contents

EN

Official Journal of the European Union

L 173/43

On 5 July 2004, in accordance with Article 104(6) of the Treaty establishing the European Community (TEC), the Council decided, in Decision 2004/918/EC (1), that an excessive deficit existed in Hungary and adopted a Recommendation under Article 104(7) TEC with a view to bringing the excessive deficit situation to an end by 2008.

On 18 January 2005, in accordance with Article 104(8) TEC, the Council considered that Hungary had not taken effective action in response to its Recommendation and adopted another Recommendation under Article 104(7) TEC on 8 March 2005, confirming the 2008 deadline for the correction of the excessive deficit. On 8 November 2005, the Council decided that Hungary had for the second time failed to comply with its Recommendation under Article 104(7) TEC. Accordingly, it addressed a third Recommendation under Article 104(7) TEC to Hungary on 10 October 2006, postponing the deadline for the correction of the excessive deficit to 2009. On 7 July 2009 the Council concluded that the Hungarian authorities could be considered to have taken effective action in response to the Council Recommendation of 10 October 2006 and, against the background of the severe economic downturn, issued a revised Recommendation under Article 104(7) TEC ("the Council Recommendation of 7 July 2009"), setting once more a new deadline for correction, namely, 2011. On 27 January 2010 the Commission concluded that Hungary had taken effective action in response to the Council Recommendation of 7 July 2009, with which the Council concurred in its conclusions on 16 February 2010, but alerted about considerable risks.

According to the provisions of Article 126(8) of the Treaty on the Functioning of the European Union (TFEU), the Council decided on 24 January 2012 that Hungary had not taken effective action in response to the Council Recommendation of 7 July 2009 within the period laid down in that Recommendation. While the 3 % GDP Treaty reference value was not breached in 2011, this was not based on a structural and sustainable correction and hinged upon substantial one-off revenues. This was accompanied by an estimated cumulative structural deterioration of over 2 % of GDP in both 2010 and 2011 compared to a recommended cumulative fiscal improvement of 0,5 % of GDP. Moreover, while the authorities were implementing structural measures in 2012, which were expected to largely offset the previous deterioration, the 3 % GDP Treaty reference value would again be respected in 2012 only thanks to one-off measures of close to 1 % of GDP and would be breached in 2013.

On 13 March 2012, the Council adopted a new Recommendation in accordance with Article 126(7) TFEU ("the Council Recommendation of 13 March 2012") for Hungary to bring the excessive deficit to an end by 2012. The Hungarian authorities were asked to undertake the following steps in particular: (i) to put an end to the excessive deficit situation by 2012 in a credible and sustainable manner; (ii) to undertake an additional fiscal effort of at least ½ % of GDP to ensure the attainment of the 2012 deficit target of 2,5 % of GDP; and (iii) to take the necessary additional measures of a structural nature to ensure that the deficit in 2013 remains well below the 3 % of GDP threshold. At the same time, the government debt ratio was recommended to be brought back on a declining path as soon as possible so that it represents sufficient...