ECOFIN extended the excess deficit procedures against Lithuania, Malta and Romania
euinside, February 18, 2010
One more year will now have Lithuania, Malta and Romania so as to return their budgetary deficit within the framework below 3% of GDP. This is now possible after the Economic and Finance Ministers Council has decided to extend the excess deficit procedures against the three countries. Thus Malta will have to reduce its deficit by 2011 and not this year, Lithuania and Romania - by 2012, instead of 2011. However, the three states will have to undertake actions to reduce the budgetary deficit by August the 16th.
Earlier the ECOFIN confirmed that Greece has to return to the Stability and Growth Pact framework by 2012. Currently its budgetary deficit is 12.7% of GDP. This year Greece has to reduce it to 8.7%. Unlike the other 3 countries, of which only Malta is a member of the euro area, Greece is required to do some very specific things: urgent measures should be applied by May 15th and by the 16th of March Greece has to present a report in which the intentions of the government are clearly outlined to achieve the main purpose - reduction of the budgetary deficit. And for more clarity and avoiding of whatever misunderstanding, the ECOFIN specified exactly what structural reforms the Greek government should implement: salaries freeze, pension and healthcare reform, reform of public administration, of the productivity market, the business environment, increase productivity and employment.
And regarding the recommendations for another 3 countries - Latvia, Hungary and Poland - the Council decided that there was no need of additional measures because the three countries had complied with all advices and would achieve their target of reducing budgetary deficits below 3% by 2012.