| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2013) 392 final (29.5.13) |
| Publication Date | 29/05/2013 |
| Content Type | Policy-making |
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According to Article 126 of the Treaty on the Functioning of the European Union (TFEU) Member States shall avoid excessive government deficits. On 2 December 2009, the Council decided that an excessive deficit existed in the Netherlands and issued a recommendation to correct the excessive deficit by 2013 at the latest, in accordance with 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. In order to bring the general government deficit below 3% of GDP in a credible and sustainable manner, the Dutch authorities were recommended to implement the fiscal measures in 2010 as envisaged in the 2010 budget and, starting consolidation in 2011, put an end to the excessive deficit situation by 2013. According to the Commission services' updated 2013 Spring Forecast, the structural balance is expected to improve by around 0.7% of GDP per year on average over the adjustment period 2010-2013 but is forecast to deteriorate in 2014 by around 0.3 pp. On the basis of the SF2013, the average fiscal effort over the period 2011-2013 would thus be close to the required 0.75% of GDP. When adjusted for the significant downward revision in potential output growth since the time when the 2009 EDP recommendation was issued and for the impact of revisions on the composition of economic growth on revenue, the average annual structural effort (1.1% of GDP) exceeds the recommended average annual fiscal effort (0.75% of GDP) over 2011-2013 required in the 2009 Council EDP recommendation by a substantial margin. The Netherlands can therefore be considered to have taken effective action in line with the Council Recommendation. For the period 2011-2013 the overall fiscal effort according to a bottom-up approach amounts to 4% of GDP, or around 1.3% of GDP annually, broadly equally divided between revenue and expenditure measures. The bottom-up assessment of the fiscal consolidation measures taken in the years 2010-2013 thus confirms the conclusion that effective action has been taken by the Netherlands. Consistent with the rules of the Stability and Growth Pact, considering all factors, in particular the substantial deterioration in the budgetary position resulting from the weaker overall position of the economy relative to the one underlying the original Council recommendation, suggests that a new deadline for the correction of the excessive deficit in the Netherlands by 2014 is appropriate. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2013:392:FIN |
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| Countries / Regions | Netherlands |
