Changes from report parliamentary committee draft to plenary report

RemovedArticle 15 – paragraph 2 – point e: deleted

AddedImplementation of the European Semester

RemovedArticle 15 – paragraph 2 – point f: (f) whether the public debt ratio stabilises over the adjustment period and is reduced by at least [x] p.p of debt to GDP on average over the projection period (i.e. the adjustment period plus 10 years);

Added1. Whenever necessary, following the assessment pursuant to this Regulation of the medium-term fiscal-structural plans, the annual progress reports and the socio-economic situation of the Member States concerned, the Council shall, on the basis of recommendations from the Commission, address recommendations to those Member States making full use of the legal instruments provided in Articles 121 and 148 TFEU and related secondary legislation.

RemovedArticle 15 – paragraph 3 – point b: (b) whether the other reform and investment commitments contained in the plan comply with the requirements of Article 12, first paragraph, points (b) and (ba).

Added2. Member States shall take due account of the broad guidelines for the economic policies of the Member States, of the employment guidelines and of the recommendations referred to in Article 3, second paragraph, points (a) and (b) before taking key decisions in the development of their economic, social, employment, structural and budgetary policies. Progress shall be monitored by the Commission.

RemovedArticle 16 – paragraph 1: The Council, on a recommendation from the Commission, shall adopt a recommendation setting the net expenditure path of the Member State concerned and, if applicable, endorsing the set of reform and investment commitments underpinning an extension of the adjustment period included in its national medium-term fiscal-structural plan within four weeks of the adoption of the Commission recommendation as a rule. The Commission recommendation shall be accompanied by an evaluation of the EFB and the national independent fiscal institution regarding the fulfilment of the criteria in Article 15 and the assumptions used in the reference trajectory.

Added3. Failure by a Member State to act upon the guidance received may result in:

RemovedArticle 18 – paragraph 1 – introductory part: The Council shall, on a recommendation from the Commission, recommend to the Member State concerned that the reference trajectory issued by the Commission in accordance with Article 5, second subparagraph, be the net expenditure path of the Member State where:

Added(a) further country-specific recommendations;

RemovedArticle 18 – paragraph 1 – point a: (a) the Member State concerned fails to submit a revised national medium-term fiscal-structural plan within two months of the recommendation by the Council;

Added(b) a warning by the Commission or a recommendation by the Council pursuant to Article 121(4) TFEU;

RemovedArticle 18 – paragraph 1 – point c: (c) the Member State fails to submit an initial national medium term fiscal-structural plan or a new national medium-term fiscal-structural plan at the end of the period covered by the previous national medium-term fiscal-structural plan.

Added(ba) a recommendation by the Council in accordance with Article 148(4) TFEU;

RemovedArticle 19 – paragraph 1: Where a Member State has been granted an extension of its adjustment period but fails to satisfactorily comply with its set of reform and investment commitments underpinning the extension referred to in Article 13(1), the Council is expected to, as a rule, follow the recommendation from the Commission, and recommend a revised net expenditure path with a shorter adjustment period.

Added(c) measures under this Regulation, Council Regulation (EC) No 1467/97 or Regulation (EU) No 1176/2011.

RemovedArticle 19 a (new): Article 19a / Medium-term fiscal-structural plans scoreboard / 1. The Commission shall establish a medium-term fiscal-structural plans scoreboard (the ‘Scoreboard’), which shall display the progress of the implementation of the national medium-term fiscal-structural plans of the Member States, including the reforms, investments and Union priorities as well as the stage of the life-cycle of the plan and the status of the actual net expenditure path. / 2. The Commission shall be empowered to adopt a delegated act in accordance with Article 33 to supplement this Regulation by defining the detailed elements of the Scoreboard with a view to displaying the progress of the implementation of the medium-term fiscal-structural plans as referred to in paragraph 1. / 3. The Scoreboard shall be operational by [1 June] 2024 and shall be updated by the Commission twice a year. The Scoreboard shall be made publicly available on a website or internet portal.

AddedTHE TECHNICAL TRAJECTORY

RemovedArticle 20 – paragraph 1: 1. Each Member State shall submit to the Commission an annual progress report on the implementation of its national medium-term fiscal-structural plan, by 30 April each year at the latest.

AddedReference trajectory

RemovedArticle 21 – paragraph 2: The Commission shall set up a control account and shall keep track of cumulative upward (debit) and downward (credit) deviations of actual net expenditures from the net expenditure path.

AddedFor each Member State having a public debt above the 60% of GDP reference value or a government deficit above the 3% of GDP reference value, the Commission shall put forward, in a report to the European Parliament and the Council, a reference trajectory. For the preparation of the report, the Commission shall consult the Member State concerned including, where applicable, on its proposed reference trajectory, as part of the dialogue referred to in Article 7(1a), while ensuring fair and equal treatment of all Member States.

RemovedArticle 21 – paragraph 2 a (new): The cumulated balance of the control account in a given period is the sum of the yearly debits and credits registered during that period.

AddedThe reference trajectory shall be set in levels of net expenditure and be based on the debt sustainability analysis methodology as referred to in Article 7(1), point (a), which is publicly available.

RemovedArticle 21 – paragraph 2 b (new): A Member State will be deemed not to be in compliance of its net expenditure path where the cumulated balance of the control account during the adjustment period is higher than [X% of GDP] in the years of positive GDP growth.

AddedThe reference trajectory shall cover a minimum adjustment period of 4 years of the national medium-term fiscal-structural plan, and its possible extension by a maximum of 3 years pursuant to Article 13. The Commission shall make the report public in accordance with Article 9.

RemovedArticle 22 – paragraph 1: Each national independent fiscal institution referred to in Article 8 of Council Directive […]32 [on the national budgetary frameworks] shall provide an assessment of compliance of the budgetary outturns data reported in the progress report referred to in Article 20 with the net expenditure path, including of non quantifiable targets. Where applicable, each national independent fiscal institution shall also analyse the factors underlying a deviation from the net expenditure path.

AddedRequirements for the reference trajectory

RemovedArticle 22 – paragraph 1 a (new): The Commission shall establish the European Advisory Fiscal Board (EFB), an independent expert group, which shall have an advisory role in respect of the Union’s economic policy coordination. The Commission shall have no voting rights.

AddedThe reference trajectory shall ensure that:

RemovedArticle 23 – paragraph 1: 1. In the event of a significant risk of deviation from the net expenditure path as monitored by the control account or a risk that the government deficit may exceed the 3% of GDP reference value, the Commission may address a warning to the Member State concerned in accordance with Article 121(4) TFEU.

Added(a) the public debt ratio is put or remains on a plausibly downward path, leading to sustainable debt reduction or stays at prudent levels;

RemovedArticle 24 – paragraph 1: On a recommendation from the Commission, the Council may adopt a recommendation allowing Member States to deviate from their net expenditure path, in the event of a severe economic downturn in the euro area or the Union as a whole, provided that, according to a quantitative analysis by the Commission, it does not endanger fiscal sustainability in the medium term. The Council shall specify a time-limit for such deviation.

Added(b) the government deficit is brought and maintained below the 3% of GDP reference value;

RemovedArticle 25 – paragraph 1: On a recommendation from the Commission, the Council may adopt a recommendation allowing a Member State to deviate from its net expenditure path where exceptional circumstances outside the control of the Member State lead to a major impact on the public finances of the Member State concerned, provided that, according to a quantitative analysis by the Commission, it does not endanger fiscal sustainability in the medium term. The Council shall specify a time-limit for such a deviation.

Added(c) the fiscal adjustment effort over the period of the national medium-term fiscal-structural plan is at least proportional to the total effort over the entire adjustment period;

RemovedChapter VI – title: DEMOCRATIC ACCOUNTABILITY AND TRANSPARENCY

Added(d) the public debt ratio stabilises over the adjustment period and is reduced every year over the projection period on average by at least one percentage point of debt to GDP for the Member States with a debt-to-GDP ratio exceeding 90% and at least half a percentage point for the Member States with a debt-to-GDP ratio of 60% to 90%.

RemovedArticle 25 a (new): Article 25a / Role of the European Parliament / 1. The European Parliament shall be duly involved in a regular and structured way in the European Semester in order to increase the transparency, democratic accountability and ownership for the decisions taken, in particular by means of an economic dialogue. / 2. The Commission shall transmit to the European Parliament the national medium-term fiscal-structural plans officially submitted by the Member States. The Commission shall inform the European Parliament of its overall assessment of those medium-term fiscal-structural plans. The competent committee of the European Parliament may request the Commission and relevant stakeholders, including social partners, to appear before it on which occasion the Commission shall be invited to present its assessment of medium-term fiscal-structural plans and the relevant stakeholders to comment thereon. / 3. The Council and the Commission shall regularly inform the European Parliament of the application of this Regulation. / 4. The Council and the Commission shall include in their report to the European Parliament the results of the multilateral surveillance carried out pursuant to this Regulation. / 5. The Eurogroup shall annually report to the European Parliament on the outcome of its work on the specific responsibilities related to the single currency in the area of multilateral surveillance. / 6. Information shall be prepared and transmitted by the Commission to the Council and any of i…

Added▌

RemovedArticle 25a is inserted in Chapter VI before Article 26.

AddedIf a Member State’s government deficit is above 3% while the public debt is below the 60% of GDP reference value, point (d) shall not apply.

RemovedArticle 26 – paragraph 1: In order to enhance the dialogue between the institutions of the Union, in particular the European Parliament, the Council and the Commission, and to ensure transparency and accountability, the President of the Council, the Commission and, where appropriate, the President of the European Council or the President of the Eurogroup shall appear before the European Parliament when invited, to discuss the policy guidance to Member States issued by the Commission, the conclusions drawn by the European Council and the results of multilateral surveillance carried out under this Regulation. / The Economic and Financial Committee, the Economic Policy Committee, the Employment Committee and the Social Protection Committee may be consulted by the European Parliament within the framework of the European Semester where appropriate. Relevant stakeholders, in particular the social partners, shall be involved within the framework of the European Semester, on the main policy issues where appropriate, in accordance with the provisions of the TFEU and national legal and political arrangements.

AddedThe reference trajectories shall be differentiated for each Member State. ▌.

RemovedArticle 26 – paragraph 2: deleted

AddedThe reference trajectory procedure

RemovedArticle 26 a (new): Article 26a / Medium-term structural-fiscal plan dialogue / 1. In order to enhance the dialogue between the European Parliament and the Commission, and to ensure greater transparency and accountability, the Commission shall appear before the competent committee of the European Parliament every two months to discuss the content, submission, assessment and monitoring of its medium-term fiscal-structural plans as part of multilateral budgetary surveillance, including the information listed in Article 25a(7). / 2. In order to enhance the dialogue between the Union institutions, in particular the European Parliament and the Council, and to ensure greater transparency and accountability, the competent committee of the European Parliament may invite the President of the Council and, where appropriate, the President of the European Council or the President of the Eurogroup to appear [at least twice a year] before its competent committee to discuss the matters referred to in paragraph 1.

Added1. At least three months before the date for Member States ▌to submit their medium-term fiscal-structural plans for the first time and mutatis mutandis thereafter, the Commission shall provide the following information to the European Parliament and the Council:

RemovedArticle 28 – title: Economic Dialogue with a Member State

Added(a) the country-specific underlying medium-term public debt projection framework based on the debt sustainability analysis methodology and results;

RemovedArticle 28 – paragraph 1: Upon invitation, a Member State shall appear before the competent committee of the European Parliament in an exchange of views in the following cases: / (a) where a Member State indicates willingness to discuss the content, submission, assessment and monitoring of its medium-term fiscal-structural plans as part of multilateral budgetary surveillance; / (b) where the Council makes a recommendation to a Member State pursuant to Article 18 that the reference trajectory issued by the Commission be the net expenditure path of the Member State; / (c) where a Member State requests to submit pursuant to Article 14 a revised national medium-term fiscal-structural plan to the Commission before the end of its adjustment period; / (d) where the Council makes a recommendation to a Member State pursuant to Article 19 for a revised net expenditure path with a shorter adjustment period; / (e) where the Council addresses a recommendation to a Member State pursuant to Article 23(2) in the event of a significant risk of deviation from the net expenditure path.

Added(b) its country-specific macroeconomic forecast and assumptions.

RemovedArticle 29: deleted / (deleted) / (deleted) / (deleted)

Added▌

RemovedArticle 30 – paragraph 3 – subparagraph -1 (new): Where the Council decides against opening an excessive imbalance procedure under Article 7(2) of Regulation (EU) No 1176/2011 in cases where the Commission considers that the Member State concerned is affected by excessive imbalances on the basis of the in-depth review referred to in Article 5 of that Regulation, it shall publicly explain its position.

Added1a. At least two months before the date for Member States to submit their medium-term fiscal-structural plans, the Commission and the Member State concerned shall hold a dialogue with the objective of ensuring that the reference trajectory complies with Articles 5 and 6. As part of that dialogue, the Member State concerned shall be allowed to present a proposal for a reference trajectory to the Commission, taking into account the information referred in paragraph 1, points (a) and (b). The proposal for a reference trajectory shall be accompanied by an opinion of the independent fiscal institution of the Member State concerned. However, failure by the independent fiscal institution to deliver such an opinion within a reasonable timeframe shall not prevent the submission of the Member State’s proposal for a reference trajectory.

RemovedArticle 31 – paragraph 2 a (new): Where a Member State has an active medium-term fiscal-structural plan, and that Member States becomes subject to a macroeconomic adjustment programme in accordance with Article 7 of Regulation (EU) No 472/2013, the medium-term fiscal-structural plan shall be taken into account in the design of the macroeconomic adjustment programme.

AddedWhere, in the course of the dialogue referred to in the first subparagraph, the Member State concerned chooses not to present a proposal for a reference trajectory or fails to do so in a timely manner, or where the Commission and the Member State concerned are unable to agree on a reference trajectory the Commission shall put forward a reference trajectory meeting the requirements set out in Article 6.

RemovedArticle 32: deleted / (deleted) / (deleted)

AddedThe Commission shall transmit the reference trajectories to European Parliament and the Council, together with the proposals for reference trajectories by the Member States and all data, assumptions and calculations underlying those trajectories, in such a way that allows for their replication.