20 November 2019

Autumn Fiscal Package: Commission adopts Opinions on euro area Draft Budgetary Plans

The European Commission has presented its Opinions on euro area Member States' 2020 Draft Budgetary Plans, taken steps under the Stability and Growth Pact and adopted the fourth Enhanced Surveillance Report for Greece.

Since July this year and for the first time since 2002, no euro area Member State is under the Excessive Deficit Procedure. The euro area debt-to-GDP ratio is expected to continue its declining path of recent years and to fall from about 86% in 2019 to about 85% in 2020. This is happening against the backdrop of a weakening European and world economy.

Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: "With mounting risks weighing on Europe's economic growth prospects, it is reassuring to see euro area countries like Germany and the Netherlands using fiscal space to support investment. However, there is scope for them to do more. On the other hand, Member States with very high levels of debt – such as Belgium, France, Italy and Spain – should take advantage of the lower interest expenditure to reduce their debt. It should be their priority."   

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “For the past five years, this Commission has carefully assessed the Draft Budgetary Plans of euro area Member States. With this year's opinions, we confirm our commitment to a flexible, intelligent application of our common rules, guided by an awareness of the economic reality in each country and in the euro area as a whole. In that sense, the Commission invites countries with high debt to pursue prudent fiscal policies, while encouraging those with fiscal space to invest further. This differentiated approach will strengthen the euro area.”

Assessment of the Draft Budgetary Plans of the euro area Member States

Following the recent Autumn 2019 Economic Forecast and consultations with the Member States, the Commission has adopted its Opinions on the Draft Budgetary Plans of all euro area countries. It has found that no Draft Budgetary Plan for 2020 shows particularly serious non-compliance with the requirements of the Stability and Growth Pact. Nine Member States' Plans are compliant with the Stability and Growth Pact in 2020; two Member States are broadly compliant and for eight Member States, the Plans pose a risk of non-compliance with the Stability and Growth Pact next year.

The Draft Budgetary Plans of Germany, Ireland, Greece, Cyprus, Lithuania, Luxembourg, Malta, the Netherlands and Austria are found to be compliant with the Stability and Growth Pact in 2020.

The Draft Budgetary Plans of Estonia and Latvia are found to be broadly compliant with the Stability and Growth Pact in 2020. The implementation of the Draft Budgetary Plans might result in some deviation from the country's medium-term budgetary objective for Latvia and from the adjustment path towards this objective in the case of Estonia.

For Belgium, Spain, France, Italy, Portugal, Slovenia, Slovakia and Finland the Draft Budgetary Plans pose a risk of non-compliance with the Stability and Growth Pact in 2020. The implementation of the Plans of these Member States might result in a significant deviation from the adjustment paths towards the respective medium-term budgetary objective. In the cases of Belgium, Spain, France and Italy, non-compliance with the debt reduction benchmark is also projected. [...]

Communication on the 2020 Draft Budgetary Plans of the euro area

Commission Opinions on the 2020 Draft Budgetary Plans

Full press release

Opening remarks by Vice-President Dombrovskis on the Autumn Fiscal Package

 

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