Greater focus on debt and
sustainability is a major part of the Commission’s drive to
achieve a better balance between sustainable growth and
Making the Stability and Growth Pact more
“intelligent” was one of Commission President Prodi’s
opening remarks at a press conference on 3 September.
After a two-year process, the Commission has unveiled a
Communication setting out the overarching parameters of
the forthcoming debate on the Stability and Growth Pact.
Pointing out that the debate was likely to spill over
into the Luxembourg Presidency, Economic and Financial
Affairs Commissioner Joaquin Almunia that the 3 per cent
deficit limit and the 60 per cent debt limit would be
staying in place.
Almunia said that improved economic co-ordination
required the more effective use of the more
Broad Economic Policy Guidelines
. He also noted that budgetary co-ordination was more
about “evolution than reform”.
According to the Commission, the debate should revolve
around four main issues. Firstly, in terms of debt and
sustainability, he pointed out that one-off measures and
implicit debt liabilities were a major problem.
Secondly, he pointed out that different economic and
debt situations should be taken into account when setting
the medium-term budgetary objectives for each Member
The Spanish commissioner then urged Member States to
consolidate their finances during economic upswings. In
this context he noted that some of today’s excessive
deficit procedures might have been avoided had countries
made better use of favourable economic conditions in 1999
Finally, where countries did fall foul of the
Maastricht criteria, Almunia called for a softening of
the definition of ‘exceptional circumstances’ to allow
not just for severe recessions but also protracted
slowdowns. He said that differences in cyclical
conditions could justify a country-specific
In a reference to the ECJ’s judgement as regards
France and Germany’s persistent violations of the pact
EURACTIV 14 July
), Almunia said that the Commission need to act
predictably but that decisions adopted by the Council
must be predictable too.