Press Release: Commission assesses Stability and Convergence Programmes of Ireland, Greece, Spain, France, Latvia and Malta; presents reports under excessive deficit procedure

The European Commission examined the updated Stability and Convergence Programmes (SCPs) of Ireland, Greece, Spain, France, Latvia and Malta. Against the background of the ongoing sharp economic downturn, budgetary positions are estimated to have deteriorated markedly in 2008 and to continue deteriorating in 2009 in Ireland, Spain, France and Latvia. In Spain and France this also reflects significant economic stimulus packages adopted in line with the European Recovery Plan that called for timely, targeted and temporary fiscal measures in Member States with fiscal room for manoeuvre. Ireland and Malta have taken a number of measures to support the economy as part of a broader consolidation effort, which seems adequate in light of the macro-fiscal and competitiveness challenges in these countries. Greece has not adopted fiscal stimulus measures, an adequate posture in view of still positive growth and its high debt and large economic imbalances. Latvia also refrained from adopting short-term fiscal stimulus measures given the need to re-balance its economy and restore investor confidence. As all six countries had a budget deficit of more than 3% in 2008, the Commission also adopted reports under the corrective arm of the Stability and Growth Pact. In accordance with Article 104.3 of the Treaty, the reports analyse the reasons for the breach of the 3% reference value, taking due regard of the economic background and other relevant factors. The Commission examined another 11 SCPs today, but in all cases the budgetary position remains within the limits of the Pact.