Press Release: Commission assesses convergence programmes of Estonia, Lithuania, Sweden and the United Kingdom

The European Commission has examined the updated convergence programmes of Estonia Lithuania, Sweden and the United Kingdom. Sweden's and Estonia's medium-term budgetary positions are sound and they provide good examples of fiscal policies conducted in compliance with the Stability and Growth Pact. To contribute to macroeconomic stability, Estonia should, however, aim for a higher budgetary surplus than planned for 2007. As to Sweden it will be important to ensure that the reduction of the budgetary surplus in 2007 does not spill over to subsequent years. The programme of the United Kingdom seems broadly consistent with a correction of the excessive deficit by the financial year 2006/07, the deadline set by the Council. However, it should strengthen further its fiscal position in the later programme years in order to address the risks to long term sustainability of the public finances. Lithuania also envisages continued fiscal consolidation, but its budgetary stance may not ensure that the medium term objective is achieved by 2008. Lithuania should therefore exploit the good times and back its programme up with measures to achieve an annual improvement in the structural balance of 0.5% of GDP.