30 May 2012

Commission recommends abrogation of EDP for Bulgaria and Germany, lifting of Cohesion Fund suspension for Hungary

The Commission has concluded that the correction of the excessive deficit for Germany and Bulgaria is ensured. The Commission has also concluded that Hungary has taken the necessary corrective action for the lifting of the suspension of its Cohesion Fund commitments.

The Commission is recommending that the Council abrogates the EDP, as foreseen in Article 126(12) of the Treaty, for Bulgaria and Germany. In March this year, Bulgaria and Germany notified that their 2011 general government deficit was below 3 per cent of GDP. Following the validation of these figures by Eurostat on 23 April 2012, and also taking into account the fact that the Commissions’ 2012 spring forecast, published on 11 May (IP/12/466), shows that these deficits will remain durably below 3 per cent of GDP, the Commission has concluded that the correction of the excessive deficit for these countries is ensured. 

Bulgaria reduced its general government deficit from 3.1 per cent of GDP in 2010 to 2.1 per cent of GDP in 2011. According to the Commission services' 2012 spring forecast, the deficit is expected to shrink further to 1.9 per cent of GDP in 2012 and 1.7 per cent of GDP in 2013. Germany decreased its general government deficit from 4.3 per cent of GDP in 2010 to 1.0 per cent of GDP in 2011. According to the Commission services' 2012 spring forecast, the deficit is expected to amount to 0.9 per cent of GDP in 2012 and 0.7 per cent of GDP in 2013.

The European Commission has adopted a proposal for a Council decision to lift the suspension of commitments from the Cohesion Fund for Hungary, after concluding that the country has taken the necessary action to correct its excessive deficit, in line with the Council Recommendation of 13 March 2012. More specifically, the Commission has concluded in its assessment that the 2012 budget deficit target of 2.5 per cent of GDP is expected to be reached, and the 2013 budget deficit is expected to be well below the 3 per cent of GDP reference value, despite the slight weakening of the macro-economic environment, as indicated by the Commission in its 2012 spring forecast.

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