Recommendation for a Council Recommendation with a view to bringing an end to the situation of an excessive government deficit in Cyprus

On 13 July 2010, the Council decided, in accordance with Article 126(6) TFEU that an excessive deficit existed in Cyprus and issued a Recommendation to correct the excessive deficit by 2012 at the latest, in accordance with Article 126(7) TFEU and Article 3 of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure.

On 27 January 2011, the Commission concluded in a Communication to the Council that Cyprus had taken effective action in compliance with the Council recommendation of 13 July 2010 to bring its government deficit below the 3% of GDP reference value and considered that no additional steps under the excessive deficit procedure were necessary.

On 10 July 2012, the Council addressed country-specific recommendations to Cyprus based, inter alia, on the assessment of Cyprus's national reform programme and Cyprus's stability programme covering the period 2012-15. The first recommendation calls for the rigorous implementation of the budgetary strategy in 2013 and beyond. It also calls for an acceleration of the phase-in of an enforcable multianuual budgetary framework with a binding staturory basis and corrective mechanism. This framework should be reinforced also by the implementation of programme and performance budgeting. Given the inefficiencies in the tax administration and the tax collection, measures improving tax compliance and combating tax evasion need to be adopted.

Monitoring of progress on implementation of Cyprus's EDP commitments will be carried out at regular intervals. In the event of underperformance of revenues or higher social spending needs, Cyprus should stand ready to take additional measures to preserve the attainment of fiscal targets.

EUR-Lex: COM(2013)284: Follow the progress of this recommendation through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2013:284:FIN

EUR-Lex: SWD(2013)176: Analysis by the Commission services of the budgetary situation in Cyprus following the adoption of the Council Recommendation to Cyprus of 13 July 2010 with a view to bringing an end to the situation of an excessive government deficit http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2013:176:FIN

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