COUNCIL DECISION of 10 May 2010 addressed to Greece with a view to reinforcing and deepening fiscal surveillance and giving notice to Greece to take measures for the deficit reduction judged necessary to remedy the situation of excessive deficit; OJEU 11.6.2010 L 145/6.
The decision is based on Article 126(9) of the Treaty on the Functioning of the European Union (TFEU)(in the latest updated version of the treaties, OJEU 30.3.2010 C 83/101):
Article 126(9) TFEU
9. If a Member State persists in failing to put into practice the recommendations of the Council, the Council may decide to give notice to the Member State to take, within a specified time limit, measures for the deficit reduction which is judged necessary by the Council in order to remedy the situation.
In such a case, the Council may request the Member State concerned to submit reports in accordance with a specific timetable in order to examine the adjustment efforts of that Member State.
The decision is also based on Article 136 TFEU concerning measures specific to those member states whose currency is the euro. The Council Decision states:
Article 136(1)(a) TFEU foresees the possibility of adopting measures specific to the Member States whose currency is the euro with a view to strengthening the coordination and surveillance of their budgetary discipline.
The Council presents the history of the excessive deficit procedure (EDP) concerning Greece. It then states that the economic situation has worsened:
However, the abrupt change in the economic scenario means that those plans can no longer be considered valid, requiring even more drastic action in the course of the current year. At the same time, the depth of the contraction in the economy that can now be expected makes the achievement of the initial deficit reduction path unfeasible. Unexpected adverse economic events with major unfavourable consequences for government finances can be considered to have occurred in Greece and revised recommendations pursuant to Article 136 and Article 126(9) TFEU are therefore justified.
Beggars are not choosers
The government deficit of 13.6 % of GDP in 2009 and the debt level of 115.1 % (both subject to potential moves upward after statistical investigations) can be described with one word: catastrophic.
Since the FIFI World Cup kicks off today, we could use a football parable:
If one of our players commits a serious individual mistake in front of our goal, and the other team scores, our team is down by one goal (and on its way to lose the match).
The euro area is a team. The eurozone expects every team member to do its duty.