Vespasianus
Princeps thermarum
Dal bollettino economico Bce.
According to the European Commission’s spring 2016 forecast, none of the countries with a deficit above the 3% of GDP reference value in 2015 (i.e. Portugal, Spain and France) is expected to deliver a structural consolidation over the period 2016-17 (i.e. a reduction of the budget deficit through factors other than the impact of the economic cycle and temporary budgetary measures).
Moreover, significant shortcomings vis-à-vis structural adjustment requirements are anticipated in countries that are currently under the Pact’s preventive arm, even though for some countries these requirements have been lowered markedly.
In concrete terms, following a recent agreement on how to operationalise the flexibility that the SGP includes for structural reforms, countries that have not achieved their MTOs can progress towards them more slowly by delivering smaller structural consolidation efforts if they implement structural reforms, additional investment and pension reforms. The structural adjustment requirements have for some countries been further reduced to accommodate the costs they incur for hosting refugees and for additional security spending. Overall, the granting of this flexibility has lowered the requirements for progressing towards the MTO from, on average, 0.5% of GDP to -0.1% of GDP in 2016.
This notwithstanding, the countries under the SGP’s preventive arm which have not yet achieved their MTO are expected to fall short of the reduced requirements by conducting expansionary fiscal policies corresponding, on average, to -0.3% of GDP. This further delays the achievement of MTOs by Member States and thus hinders a return to robust public finances during the unique window of opportunity provided by favourable financial conditions.
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Furthermore, the European Commission’s country-specific recommendations advised extending the EDP deadlines for Portugal and Spain by one year to 2016 and 2017, respectively, with structural effort requirements of 0.25% of GDP this year. Notably, while the country-specific recommendations are based on Articles 121 and 148 TFEU, the Council has to take decisions under the excessive deficit procedure as laid out under Article 126 TFEU.
According to the European Commission’s spring 2016 forecast, none of the countries with a deficit above the 3% of GDP reference value in 2015 (i.e. Portugal, Spain and France) is expected to deliver a structural consolidation over the period 2016-17 (i.e. a reduction of the budget deficit through factors other than the impact of the economic cycle and temporary budgetary measures).
Moreover, significant shortcomings vis-à-vis structural adjustment requirements are anticipated in countries that are currently under the Pact’s preventive arm, even though for some countries these requirements have been lowered markedly.
In concrete terms, following a recent agreement on how to operationalise the flexibility that the SGP includes for structural reforms, countries that have not achieved their MTOs can progress towards them more slowly by delivering smaller structural consolidation efforts if they implement structural reforms, additional investment and pension reforms. The structural adjustment requirements have for some countries been further reduced to accommodate the costs they incur for hosting refugees and for additional security spending. Overall, the granting of this flexibility has lowered the requirements for progressing towards the MTO from, on average, 0.5% of GDP to -0.1% of GDP in 2016.
This notwithstanding, the countries under the SGP’s preventive arm which have not yet achieved their MTO are expected to fall short of the reduced requirements by conducting expansionary fiscal policies corresponding, on average, to -0.3% of GDP. This further delays the achievement of MTOs by Member States and thus hinders a return to robust public finances during the unique window of opportunity provided by favourable financial conditions.
...
Furthermore, the European Commission’s country-specific recommendations advised extending the EDP deadlines for Portugal and Spain by one year to 2016 and 2017, respectively, with structural effort requirements of 0.25% of GDP this year. Notably, while the country-specific recommendations are based on Articles 121 and 148 TFEU, the Council has to take decisions under the excessive deficit procedure as laid out under Article 126 TFEU.
