Changes from report parliamentary committee draft to plenary report

Added(19) In order to simplify EU fiscal surveillance and to reduce administrative burden, the Commission should no longer report in its overall assessment of the budgetary situation and prospects in the euro area as a whole on elements that have not proven to provide added value in the surveillance process (such as a sensitivity analyses of the risks to public finance sustainability in the event of adverse economic, financial or budgetary developments or the methodology, models and assumptions of the most recent economic forecasts of the Commission services for each Member State.)

Added(20) In case a government is not in a position to prepare a draft budget law for adoption by the national parliament, the submission of a DBP at unchanged policies is also not needed and should be replaced by a technical exchange whereby Member States provide the Commission with information regarding the macroeconomic and budgetary positions which the Commission will include in its forecasts.

Added(21) The 2012 Treaty on Stability, Coordination and Governance in the Economic and Monetary Union has established the economic partnership programmes, which became part of the Union’s economic governance framework in 2013 by virtue of Regulation (EU) No 473/2013. Their aim was to ensure a sustainable and lasting correction of the excessive deficits of Member States by requiring that Member States under EDP detail specific structural reforms designed to reduce their deficit and debt. The function of economic partnership programmes is ensured in the 2024 reform of the Union’s governance framework through two main channels. The first is through the adoption of a medium-term and risk-based approach in the medium-term fiscal-structural plans, which include the impact of reforms and investments on fiscal sustainability. The second is through the reinforcement of the EDP through the introduction of clear activation and abrogation criteria for debt-based EDPs. Therefore, Regulation (EU) No 473/2013 should be amended to take into account that economic partnership programmes have become obsolete.

Added(22) Regulation (EU) No 473/2013 introduced additional reporting requirements for Member States whose currency is the euro and which were subject to an EDP under Regulation (EC) No 1467/97. The objective of those additional requirements was to allow for a better exchange of information between the Member States concerned and the Commission and to identify risks in the compliance with the deadline for the correction of the excessive deficit early on. The 2024 reform of the Union’s economic governance framework introduced a single indicator for the assessment of compliance with the corrective net expenditure path under the EDP. Member States are to regularly report on it in their annual progress reports submitted under Regulation (EU) 2024/1263. Therefore, Regulation (EU) No 473/2013 should be amended to reduce the reporting burden and focus on implementing the 2024 reform. Member States subject to an EDP should only provide the information requested under Regulation (EU) 2024/1263, Regulation (EC) No 1467/97 and the subsequent effective action reports pertaining to Council recommendations under Article 126(7) TFEU or Council notices under Article 126(9) TFEU as foreseen in Regulation (EU) 473/2013, given that that information is sufficient to assess compliance with the corrective net expenditure path. The Commission should retain the right to request any additional information it deems necessary for budgetary surveillance purposes.

Added(23) As this additional reporting is no longer required, Regulation (EU) 473/2013 should be amended to remove the empowerment to adopt delegated acts to specify the content of the additional reporting.

Added(24) In accordance with Council recommendations under Article 126(7) TFEU or notices under Article 126(9) TFEU, Member States are to report on action taken. In order to ensure an effective monitoring of action taken to correct the excessive deficit, Regulation (EU) 473/2013 should be amended to clarify the reporting obligations stemming from those Council recommendations and to oblige Member States to submit follow-up reports to the Commission and the Council on effective action every six months when they are subject to a Council Recommendation under Article 126(7) TFEU until the Council abrogates the decision on the existence of an excessive deficit. Moreover, the Member State should submit follow-up reports on effective action to the Council and the Commission on a quarterly basis when it is the subject of a Council notice under Article 126(9) TFEU until the Council abrogates the decision on the existence of an excessive deficit. In order to reduce the reporting burden on Member States, it should be possible to include such effective action reports in the annual progress reports as defined under Regulation (EU) 2024/1263 and in the DBP, where possible. Since the EDP monitoring is to be replaced by the reporting specified under Regulation (EC) No 1467/97, the Commission should take into account all effective action reports transmitted by the Member State when making its assessment of effective action.

Added(25) Regulation (EU) No 473/2013 should be amended to simplify existing procedures and eliminate those that have not proven useful and are not in line with the overall approach of the revised framework. In particular, the provisions requiring the Commission to address to the Member State a recommendation in case of a risk of non-compliance with the deadline to correct the excessive deficit should be deleted, as the 2024 reform of the economic governance framework introduced a medium-term approach that is no longer focused on a specific year for the correction of the excessive deficit, but rather aims to ensure that the government deficit is brought and maintained below 3% of GDP over the medium term.

Added(26) Article 2(3) of Regulation (EC) No 1467/97 requires that all relevant factors as indicated in Article 126(3) TFEU be taken into account when preparing a report under Article 126(3) TFEU on the existence of an excessive deficit. An explicit requirement for the Commission opinion under Article 7(1) of Regulation (EU) No 473/2013 to be taken into account when drafting a report under Article 126(3) TFEU or when taking a decision on the existence of an excessive deficit under Article 126(6) TFEU is therefore not necessary. Moreover, taking into account the Commission opinion under Article 7(1) of Regulation (EU) No 473/2013 when recommending the imposition of a non-interest bearing deposit under Article 5 of Regulation (EU) No 1173/2011 is outdated given the deletion of that Article.

Added(27) In order to increase transparency, accountability and ownership for the decisions taken in the context of Regulation (EU) No 473/2013, an economic dialogue may take place between the European Parliament, the Council and the Commission on the specification of the content of the DBPs, the results of the discussion of the Eurogroup on the Commission DBP opinions to the extent that they have been made public, and the overall assessment of the budgetary situation and prospects in the euro area as a whole. ▌

Added(28) The Union’s strategy for growth and jobs is implemented through the Commission priorities for 2024-2029 which focus on the improvement of social and economic resilience and sustainable and inclusive growth by boosting competitiveness, productivity, growth potential, social cohesion and economic convergence, thereby helping to address the medium- and long-term challenges facing the Union.

Added(29) Regulation (EU) No 473/2013 should be amended to clarify the deadline and the content of the Commission reports on the application of that Regulation.

Added(30) Regulations (EU) 473/2013 and (EU) No 1173/2011 should therefore be amended accordingly,

AddedHAVE ADOPTED THIS REGULATION:

AddedAmendments to Regulation (EU) No 1173/2011

AddedRegulation (EU) No 1173/2011 is amended as follows:

Added(1) in Article 1, paragraph 1 is replaced by the following:

Added‘1. This Regulation sets out a system of sanctions for enhancing the enforcement of the Stability and Growth Pact in the euro area.’;

Added(2) Article 2 is amended as follows:

Added(a) point 1 is deleted;

Added(b) point 2 is replaced by the following:

Added‘(2) ‘corrective part of the Stability and Growth Pact’ means the procedure for the avoidance and correction of Member States’ excessive deficit as regulated by Article 126 TFEU and Regulation (EC) No 1467/97.’;

Added(c) point 3 is deleted;

Added(3) in Article 3, the first paragraph is replaced by the following:

Added‘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 greater transparency and accountability, the competent committee of the European Parliament may invite the President of the Council, the Commission and, where appropriate, the President of the European Council or the President of the Eurogroup to appear before the committee to discuss decisions taken pursuant to Article 6 of this Regulation.’;

Added(3a) the following article is inserted:

Added‘Article 3a

AddedInformation to the European Parliament

Added1. Information transmitted by the Commission to the Council or any of its preparatory bodies in the context of this Regulation or its implementation shall simultaneously be made available to the European Parliament, subject to confidentiality arrangements if necessary. Relevant outcomes of discussions held in Council preparatory bodies shall be shared with the competent committee of the European Parliament.

Added2. The Member State concerned may request the Commission to redact sensitive or confidential information the disclosure of which would jeopardise public interests of that Member State. In such a case, the Commission shall liaise with the European Parliament and the Council regarding how the redacted information can be made available to them in a confidential manner in accordance with the applicable rules.’;

Added(4) Articles 4 and 5 are deleted;

Added(5) Article 6 is replaced by the following:

Added‘Article 6

AddedFines

Added1. If the Council, acting under Article 126(8) TFEU, decides that a Member State has not taken effective action to correct its excessive deficit, the Commission shall, within 20 days of that decision, recommend that the Council, by a further decision, impose a fine, amounting to up to 0,02 % of the latest estimate of the previous year’s GDP of that Member State. The fine shall be paid every six months until the Council assesses that the Member State concerned has taken effective action in response to the decision issued under Article 126(7) TFEU.

Added2. The decision imposing a fine shall be deemed to be adopted by the Council unless it decides by a qualified majority to reject the Commission’s recommendation within 10 days of the Commission’s adoption thereof.

Added3. The Council, acting by a qualified majority, may amend the Commission’s recommendation and adopt the text so amended as a Council decision.’;

Added(6) Article 7 is deleted;

Added(7) in Article 8, paragraph 4 is deleted;

Added(8) Articles 9 is replaced by the following:

Added‘Article 9

AddedAdministrative nature of the sanctions

AddedThe sanctions imposed pursuant to Articles 6 and 8 shall be of an administrative nature.’;

Added(9) Articles 10 and 11 are deleted;

Added(10) in Article 12, paragraph 1 is replaced by the following:

Added‘1. For the measures referred to in Articles 6 and 8, only members of the Council representing Member States whose currency is the euro shall vote, and the Council shall act without taking into account the vote of the member of the Council representing the Member State concerned.’;

Added(11) Article 13 is replaced by the following:

Added‘Article 13

AddedReview and reports on the application of this Regulation

Added1. By XXX, and every 5 years thereafter, the Commission shall submit to the European Parliament and to the Council a report on the application of this Regulation accompanied, where appropriate, by a proposal to amend this Regulation. The Commission shall make that report public.

AddedThe report referred to in the first subparagraph shall review:

Added(a) the effectiveness of this Regulation in achieving its objectives as set out in Article 1;

Added(b) the progress in ensuring closer coordination of economic policies and sustained convergence of economic performances of the Member States in accordance with the TFEU;

Added(c) the contribution of this Regulation to achieving sustainable and inclusive growth and social and economic resilience.

Added2. The report shall be transmitted to the European Parliament and the Council.’.

AddedAmendments to Regulation (EU) No 473/2013

AddedRegulation (EU) No 473/2013 is amended as follows:

Added(1) Article 1(1) is amended as follows:

Added(a) points (a), (b) and (c) are replaced by the following:

Added‘(a) complementing the European Semester, as established in Regulation (EU) 2024/1263 of the European Parliament and of the Council*, with a common budgetary timeline;

Added(b) complementing the procedure for the prevention and correction of macroeconomic imbalances, as established by Regulation (EU) No 1176/2011;