Report from the Commission. Finland. Report prepared in accordance with Article 126(3) of the Treaty

Article 126 of the Treaty on the Functioning of the European Union (TFEU) lays down the excessive deficit procedure (EDP). This procedure is further specified in Council Regulation (EC) No 1467/97 “on speeding up and clarifying the implementation of the excessive deficit procedure”, which is part of the Stability and Growth Pact. Specific provisions for euro area Member States under EDP are laid down in Regulation (EU) No 473/2013.

This report, which represents the first step in the EDP, analyses the reasons for Finland being non-compliant with the debt criterion of the Treaty, with due regard to the economic background and other relevant factors.

Following the amendments to the Stability and Growth Pact in 2011, the debt requirement has been put on an equal footing with the deficit requirement in order to ensure that, for countries with a debt-to-GDP ratio above the 60% reference value, the ratio is brought below (or sufficiently declining towards) that value.

According to the Stability Programme, communicated to the Commission on 17 April 2014, the general government deficit for 2015 is expected to reach 1.1% of GDP while the gross debt ratio would reach 61.0% by the end of 2015, above the 60% of GDP reference value. According to the Commission 2014 Spring Forecast, the debt ratio would reach 61.2% of GDP. The planned figure, both in the Commission forecast and in the 2014 Stability Programme provides prima facie evidence on the risk of the existence of an excessive deficit based on the debt criterion in Finland in the sense of the Treaty and the Stability and Growth Pact.

The Commission has therefore prepared the following report in order to comprehensively assess the excess over the reference value, in order to conclude whether the breach of the debt criterion merits the launch of an EDP. This report is an update of the report issued on 15 November 2013. Section 2 examines the debt criterion and section 3 the relevant factors influencing the debt developments. The report takes into account the Commission 2014 Spring Forecast, released on 5 May 2014.

ESO: Background information: Commission takes steps under the Excessive Deficit Procedure (EDP) http://www.europeansources.info/record/memo-commission-takes-steps-under-the-excessive-deficit-procedure-edp/

EUR-Lex: COM(2014)432: Follow the progress of this report through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2014:432:FIN

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