Commission recommends 2012 for correction of Latvia's excessive deficit - briefing

02 July 2009
by eub2 -- last modified 02 July 2009

The European Commission on 2 July concluded that Latvia is running an excessive deficit under Article 104.7 of the EU Treaty and has proposed a deadline for its correction.

What is the legal background?

 

The EU budgetary surveillance framework implies, inter alia, that excessive deficits should be avoided. The excessive deficit procedure (EDP), as the "corrective arm" of the Stability and Growth Pact, is regulated by Article 104 of the Treaty and further specified in Council Regulation 1467/97.

Which steps were taken under the excessive deficit procedure today?

 

Based on the April notification of the fiscal outcome for 2008, the Commission today concludes that Latvia is running an excessive deficit. It recommends the Council to decide in line with this opinion and make recommendations for bringing this situation to an end by 2012. The deadline is consistent with Latvia's ongoing process of economic and budgetary adjustment and its medium-term euro adoption aim, which is the anchor of the budgetary adjustment strategy.

Next steps

 

The Ecofin Council is expected to discuss the recommendations, together with those addressed to Hungary, Lithuania, Malta, Poland and Romania (see IP/09/990 of 24 June), at its 7 July gathering. The Member States concerned will then have six months to indicate what action they intend to take to progressively reduce the budget deficit.

Documents

 

• Press release
  
  
• Art. 104(5) Commission opinion on the existence of an excessive deficit for Latvia
  
  
• Commission assessment in relation to the commission recommendation for a Council decision and recommendation under Articles 104(6) and 104(7) of the Treaty