Public finances in EMU – 2005

The Communication on Public Finances in EMU 2005 summarises the main policy messages of the yearly Public Finances in EMU report prepared by Directorate General for Economic and Financial Affairs.

The European Commission calls on Member States to live up to their renewed commitment to sound budgetary policies and pledges to implement forcefully the reformed Growth and Stability Pact. The report shows that the average budget deficit in the euro area and in the EU25 improved slightly in 2004 after having deteriorated for three consecutive years. But this was largely the result of progress in new Member States. The situation of public finances needs to be dealt with resolutely to prevent debt ratios from increasing, also in view of looming ageing prospects, and to better use public resources to foster a higher growth potential.