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(Apr 18, 2011) One of the essential requirements in order for the European Monetary Union (EMU) to function properly is that the EU members must avoid excessive budget deficits. The Protocol on the Excessive Deficit Procedure provides that EU members must agree to adhere to two conditions: a) a deficit to Gross Domestic Product ratio of 3%, and b) a debt to GDP ratio of 60%. The excessive deficit procedure is triggered at the EU level, when an EU member exceeds the deficit ceiling. In such a case, the Council issues a decision on the existence of an excessive deficit in the Member concerned, and then it makes recommendations and sets deadlines for the Member to take further action. (Protocol on Excessive Data Procedure, The Lisbon Treaty website (last visited Apr. 15, 2011).)
EU members are legally required to report to the Commission about their planned and actual budget and balance sheets twice a year, on April 1 and October 1. In implementation of the Protocol on the Excessive Deficit Procedure annexed to the Treaty of Lisbon, Regulation 479/2009, as amended on 2010, requires that the European Commission's Eurostat office report to the Parliament and the Council on the quality of data forwarded by the EU Members. Consequently, on April 11, 2011, Eurostat issued its report to the Parliament and the Council on the quality of fiscal data reported by Member States in 2010. (COM (2011) 187 final (Apr. 11, 2011).)
The report reviews the data and information provided by EU Members against the following benchmarks: timeliness and completeness, completeness of tables and supporting information, compliance with accounting rules and consistency of statistical data, dialogues held and visits made to Members, consistency with underlying government accounts, and publication of headline figures and detailed reporting tables. (Id.) When there are questions related to the data submitted, Eurostat visits the members concerned. In 2010, Eurostat visited Greece several times, Malta, Hungary, France, and Cyprus, among others. With regard to the Greek economy, the visits served as a follow-up to the questions and reservation of Eurostat on the Greek deficit and debt figures that were reported in 2009 and the subsequent release of statistics on Greece by the Commission in January 2010. (Id. at 8.)
The report concludes with an optimistic note that EU Members have made progress in the quality of data provided in 2010. The report notes that with the exception of Greek data, no other reservation was issued. The reservation on Greece was lifted by Eurostat in November 2010, after Greece provided more reliable data for the period 2006-2009. The report also noted that some issues still linger related to compliance with accounting rules and completeness, quality, and other aspects of the data. Moreover, based on the experience gained from the Greek case, the Commission plans to draft a communication to address the issues of systemic risk in national statistical systems and of the adoption of a risk-based approach with regard to Excessive Deficit Procedure data. (Id. at 9.)
|Author:||Theresa Papademetriou More by this author|
|Topic:||Economics and Public Finance More on this topic|
|Jurisdiction:||European Union More about this jurisdiction|
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Last updated: 04/18/2011