Berlin’s plans on how to bring its long-running excessive deficit below the EU’s 3% limit are due on 22 February.
Germany recorded a deficit of at least 3.7% for 2004 and may well be in breach of the Stability and Growth Pact [3% limit for public deficits] this year too. If so, it would make it four years running. Germany is currently in an excessive deficit procedure.
Spokesperson for Economic and Monetary Affairs Commissioner Joaquín Almunia, Amelia Torres, told EURACTIV that the Commission would decide on the proper course of action regarding the follow up of the excessive deficit procedure after it had seen the final deficit figure for 2005, which is expected to be published by the German statistics office on 22 February. The Commission will then submit its recommendation to the Council, which will decide.
At a press conference on 1 February, Economic and Monetary Affairs Commissioner Almunia said the Commission would discuss with the Austrian Presidency if the Council’s assessment would take place in April or in May.
According to the FT Deutschland, quoting unnamed sources, the Commission and Germany have come to a deal. Under the agreement, the EU executive would formally take the next step in the procedure and recommend savings measures for the country’s budget. Meanwhile, Germany would have until 2007 to bring its deficit under the 3% limit with Almunia reportedly having agreed not to publicly criticise Berlin and not to carry out an on the spot audit check.
However, Commission spokesperson Amelia Torres denied the existence of any such agreement.
EU official documents
- DG Economic and Financial Affairs:Germany - ongoing excessive deficit procedure under Art 104 of the Treaty
- DG Economic and Financial Affairs:2005-06 examination of stability and convergence programmes
- DG Economic and Financial Affairs:Excessive Deficit Procedure (EDP)
- DG Economic and Financial Affairs:Stability and Growth Pact
- FT Deutschland:Berlin und Bruessel legen Defizitstreit bei
Surveys and data
- German Federal Statistical Office:Development in public finances from 1950 to 2004
- German Federal Statistical Office:Public finance - debt in 2003 and 2004
- German Federal Statistical Office:Economic growth in 2005 based on exports
- German Federal Statistical Office:Detailed results on the economic performance in the 3rd quarter of 2005