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Cyprus and Greece did not submit a DBP as they are under economic adjustment programmes. Portugal did not submit a plan within the deadline set by EU legislation. The Commission already adopted an Opinion on the Draft Budgetary Plan of Spain.
With these Opinions, the Commission assesses the compliance of the Draft Budgetary Plans for the following year with the provision of the Stability and Growth Pact (SGP). No DBP for 2016 has been found in particularly serious non-compliance. In several cases, however, the Commission finds that the planned fiscal adjustments fall short, or risk doing so, of what is required by the SGP.
In addition to the country-specific analyses, and based on the Member States' budgetary plans, the Commission assessed the budgetary situation and fiscal stance in the euro area as a whole.
The Commission also prepared reports on Bulgaria, Denmark and Finland under Article 126(3) of the Treaty on the Functioning of the European Union (TFEU), analysing the breach of the deficit target and, in the case of Finland, the debt criterion. In all three cases, the reports conclude that the deficit and, where applicable, the debt criterion of the Treaty are considered as currently complied with. [...]
Commission Opinions on Draft Budgetary Plans
Regarding the twelve countries in the preventive arm of the SGP (i.e. with a budget deficit under 3%):
- for five countries (Estonia, Germany, Luxembourg, the Netherlands and Slovakia), the budget plans are found to be compliant with the requirements under the SGP.
- for four countries (Belgium, Finland, Latvia, Malta), the DBPs are found to be broadly compliant with the SGP provisions. For these countries, the plans might result in some deviation from the adjustment paths towards each country's Medium-Term budgetary Objective (MTO).
- for three countries (Austria, Italy and Lithuania), the DBPs are at risk of non-compliance with the requirements for 2016 under the SGP. The budget plans of these Member States might result in a significant deviation from the adjustment paths towards the Medium-Term Objective (MTO).
Regarding the five countries currently in the corrective arm of the SGP (i.e. in Excessive Deficit Procedure):
- for three countries, (France, Ireland and Slovenia) the DBPs are found to be broadly compliant with the requirements for 2016 under the SGP.
France, which is required to correct its excessive deficit by 2017, is projected to meet the intermediate recommended headline targets for 2015 and 2016. However, it does not yet ensure a timely correction of the excessive deficit by the 2017 deadline and the recommended fiscal effort is not projected to be met throughout the EDP period. This poses risks to compliance with the Council requirements under the EDP.
Ireland and Slovenia could move to the preventive arm of the Pact from 2016, provided a timely and sustainable correction of the excessive deficit is achieved in 2015. For 2016, there is a risk of some deviation (close to being considered significant in the case of Slovenia) from the adjustment path towards the MTO in 2016.
- The DBP of Spain, the Opinion on which was already adopted in October, contains risks for its compliance with the EDP requirements: neither the recommended fiscal effort nor the headline deficit target for 2016 is forecast to be achieved.
- Portugal has not presented a DBP yet. The Commission urges Portugal to do so as soon as possible.
The Commission asks countries whose plans are considered broadly compliant or at risk of non-compliance with the Pact to take the necessary measures within the national budgetary process to ensure that the 2016 budget will be compliant with the Pact.
Overall euro area deficit and debt are expected to fall
After falling significantly from 2.4% of GDP in 2014 to 1.9% in 2015, the aggregate budget deficit for the 16 euro area countries that submitted a DBP should decline further to 1.7% of GDP in 2016, according to their Draft Budgetary Plans. That compares with the Commission’s own assessment, set out in the Autumn Economic Forecast, which points to an improvement in the aggregate budget deficit from 2% of GDP in 2015 to 1.7% in 2016.
Based on the DBPs, the aggregate debt ratio for the euro area in 2016 should also decrease slightly from an estimated 91.1% in 2015 to just below 90% of GDP for 2016. This is largely in line with the Commission's Autumn Economic Forecast, which projects a slight decrease from 91.6% in 2015 to 90.5% in 2016.
Overall fiscal stance is expected to remain broadly neutral
The Commission's forecast points to the continuation of a broadly neutral fiscal stance (neither tightening nor loosening of public spending or taxation) in 2016 for the euro area as a whole. This should be assessed against the twin objectives of long-term sustainability of public finances and short-term macroeconomic stabilisation, namely the need to ensure a move away from external to domestic sources of growth. In these terms, the expected neutral aggregate euro area fiscal stance for next year appears broadly appropriate in light of the historically low interest rates and high external surplus of the euro area.
Press remarks by Vice-President Dombrovskis
Commissioner Moscovici's remarks