Commissie maant Verenigd Koninkrijk het excessieve tekort op de begroting aan te pakken (en)

woensdag 11 januari 2006

Today, the European Commission took the view that at 3.3% of GDP in the 2004/05 financial year, the United Kingdom is running an excessive budget deficit within the meaning of the European Union Treaty and the revised Stability and Growth Pact.

Since the deficit was already 3.2% in the previous fiscal year and is expected to remain above 3% for the current fiscal year and in 2006/07, it cannot be considered temporary. This opinion takes account of the fiscal measures announced by the UK government in its pre-budget report, in December. The Commission is asking the Council to endorse this opinion and to recommend that the deficit be brought below 3% by the forthcoming 2006/07 financial year.

"Having examined the United Kingdom's budgetary situation, the Commission considers that the deficit is likely to remain above the 3% reference value in 2005/06 and 2006/07 in spite of the recently-announced fiscal measures. While the deficit is close to the reference value, it does not result from a severe economic downturn or an unusual event, as defined by the Stability and Growth Pact, nor is the excess of a temporary nature," says Economic and Monetary Affairs Commissioner Joaquin Almunia. "So, although the UK budgetary position is less worrying than that of others in the EU , in particular as far as its debt position is concerned, the Commission recommends that the UK deficit be declared excessive and the UK asked to correct the situation".

The opinion, adopted today by the Commission, under Article 104.5 of the Treaty, follows the reporting of a deficit outturn of 3.3% of GDP in 2004/05. This is the second successive year that the UK deficit has exceeded the 3% reference value set in the EU Treaty. In 2003/04 it was 3.2%. Looking ahead, the latest information suggests that, despite recent fiscal policy measures, the deficit is expected to remain above the 3% reference value in 2005/06 (of the order of 3½% of GDP) and remain above 3% in 2006/07. The Commission ascertained that the deficit in 2004/05 was caused neither by an `unusual event', in accordance with Regulation 1467/97, nor by a severe economic downturn - the UK economy grew 3.2% in real terms in 2004 and although it is projected to slow to 1.6% in 2005 it is seen recovering to 2.3% in 2005[1]. Although the deficit may be close to the reference value, the excess is not temporary.

situation exists,. On the basis of Article 104(7) of the Treaty and Regulation 1467/97, the Commission is also submitting a draft recommendation for the correction of the deficit by 2006/07. This is the standard one-year deadline since the required fiscal improvement is small and economic growth remains reasonably satisfactory.

The Commission's opinion takes account of the opinion of the Economic and Financial Committee on its Report of 21 September 2005 (see IP/05/1168), the autumn economic forecasts and the UK's December pre-budget report.

In accordance with Art 116(4) of the EU Treaty, the United Kingdom is to "endeavour to avoid excessive deficits" even though it has an opt-out from the European single currency.
The Commission opinion is available at:
For details on the Stability and Growth Pact, see:


In August 2005, according to the excessive deficit procedure data notified by the United Kingdom, the general government deficit in the UK reached 3.2% of GDP in the 2004/05 financial year (running from April to March). This was subsequently revised up to 3.3% of GDP in the pre-budget report. These figures are around 0.1 percentage points of GDP worse than the measure used by the UK authorities, who calculate the deficit after including annual receipts of around £1.0 billion accruing from the sale of UMTS licences in 2000. This latter practice is at variance with the Eurostat decision on the treatment of such revenues. The UK's addition is therefore deducted by Commission services in order to bring the UK data in line with standard Europe-wide practices.

[1] See Commission's autumn economic forecasts at