Press Release: Commission assesses stability programmes of Ireland, Greece and Spain

On 19th February, 2008, the European Commission assessed the updated stability programmes of Ireland, Greece and Spain. Ireland was encouraged to maintain a balanced budget in structural terms while letting the automatic stabilisers absorb the slowdown in the economy reflecting developments in the residential property sector and a deterioration of the economic outlook in key trading partners. The Greek programme envisaged speeding up the reduction of the still large budget deficit, but the MTO of a balanced position in structural terms is not planned to be fully achieved within the programme period. In Spain, the budgetary position was sound with high general government surpluses above the MTO and a relatively low debt ratio. Its challenge was to foster productivity-enhancing expenditure to underpin a smooth adjustment of the economy. With regard to the long-term sustainability of public finances, Spain and Ireland were at medium risk and are invited to take further measures to contain the impact of ageing on spending, while Greece remained at high risk, which calls for continued budgetary consolidation and further reforms of pensions and health care systems.