Press Release: Commission assesses stability programmes of Germany, France, Italy, Slovenia and Netherlands

Having examined their updated stability programmes, the European Commission finds that structural budgetary adjustment is under way in Germany, France and Italy. However, greater efforts would be required to ensure that their respective medium-term budgetary targets are met. Italy should fully implement its 2007 budget so as to correct its excessive deficit and would benefit from a clearer medium-term adjustment strategy. France and Germany, following the correction of the excessive deficit, should make a greater budgetary adjustment towards their medium-term objectives, in line with the Stability and Growth Pact, which specifies that the annual improvement in the structural balance should be higher than 0.5% of GDP during "good times”. Having examined Slovenia's first stability programme, the Commission welcomes its recognition of the need for continued fiscal consolidation, but considers that the pace of adjustment should be strengthened and front-loaded. The Netherlands has presented a sound strategy for its public finances, but should make sure that it avoids a pro-cyclical policy in 2007.