18.2.2005   

EN

Official Journal of the European Union

L 47/24

(1)

By Council Decision 2002/923/EC (1), following a recommendation from the Commission in accordance with Article 104(6) of the Treaty, it was decided that an excessive deficit existed in Portugal.

(2)

In accordance with Article 104(7) of the Treaty, the Council made a Recommendation addressed to Portugal with a view to bringing the excessive deficit situation to an end (2). That Recommendation, in conjunction with Article 3(4) of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit, procedure (3), established a deadline for the correction of the excessive deficit, which should be completed in the year following its identification, i.e. 2003 at the latest.

(3)

In accordance with Article 104(12) of the Treaty, a Council decision on the existence of an excessive deficit is to be abrogated when the excessive deficit in the Member State concerned has, in the view of the Council, been corrected.

(4)

The definitions of ‘government’ and ‘deficit’ are laid down in the Protocol on the excessive deficit procedure by reference to the European System of Integrated Economic Accounts (ESA), second edition. The data for the excessive deficit procedure are provided by the Commission.

(5)

Based on the data provided by the Commission after reporting by Portugal before 1 March 2004 in accordance with Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (4), and on the Commission Spring 2004 forecast, the following conclusions are warranted:

(6)

Decision 2002/923/EC should therefore be abrogated. However, in the light of the risks to the budgetary position highlighted by the Commission Spring 2004 forecast, it is of the utmost importance that the Portuguese authorities take the appropriate measures to ensure that the general government deficit remains below 3 % of GDP in 2004 and beyond. Given the continued sizeable negative output gap projected up to 2005, and in order to maintain the momentum of budgetary consolidation, recourse to further temporary measures is acceptable in the short-term. In this regard, the Portuguese authorities should publicly confirm the measures planned and their respective amounts, until measures of a more structural nature exert their full exonerating effect on public finances.

(7)

For the consolidation to be sustained and in order to eventually achieve the medium-term objective of a budgetary position of close to balance or in surplus, in line with the broad economic policy guidelines, all one-off measures should be gradually replaced by measures of a more permanent nature, while the cyclically adjusted budgetary position should improve by at least 0,5 of a percentage point of GDP per year,