Saturday, 19 June 2010

Excessive deficit procedure: Denmark

Are you looking for materials on how budget monitoring works in the European Union, and what happens if the deficit of a member state balloons?

Are you interested in the excessive deficit procedure (EDP), or the budgetary position of Denmark?

Summaries of EU legislation

For the general reader and as introductory reading for students and others who need to start digging deeper, the Summaries of EU legislation offer first aid.

The thematic web page on Economic and monetary affairs links to various themes. One of these is Stability and growth pact and economic policy coordination.

Let us take a look at two of the pages on offer.

First, to get a picture of the framework: Preventive arm: surveillance of budgetary positions.

Then, for an overview of how the EU tries to steer member states back to the narrow path of budget discipline: The corrective arm: the excessive deficit procedure.


In both cases we notice that the descriptions are generally still valid, but the summaries have not been updated since 2007.

More than six months from the entry into force of the Lisbon Treaty, the pages still refer to the old treaty (TEC) instead of the relevant provisions of the Treaty on the Functioning of the European Union (TFEU).

For the summaries to serve their purpose, they need to be updated (even rewritten and cleared of debris) regularly.

New excessive deficit procedures

Even the more prudent EU governments have seen their budget positions deteriorate as a consequence of the financial and economic crisis: deficits overshooting the 3 per cent reference value or debt levels surpassing 60 per cent of the GDP.

On 15 June 2010 the European Commission’s D-G Economic and Financial Affairs (ECFIN) has concluded that excessive deficits exist in Cyprus, Denmark and Finland, and it has recommended deadlines for their correction to the Council (further links available).

You can gain an overview of the ongoing excessive deficit procedures, now concerning almost all member states, and for more information you can click on the links to the individual countries.

The country pages concerning Cyprus, Denmark and Finland have been updated.


On the legal portal Eur-Lex, under preparatory acts, SEC documents, we find the three relevant documents concerning Denmark (available in English, French and German, the working languages of the Commission):

COMMISSION OPINION on the existence of an excessive deficit in Denmark; Brussels, 15.6.2010 SEC(2010) 742 final

Proposal for a COUNCIL DECISION on the existence of an excessive deficit in Denmark; Brussels, 15.6.2010 SEC(2010) 743 final

Recommendation for a COUNCIL RECOMMENDATION with a view to bringing an end to the situation of an excessive government deficit in Denmark; Brussels, 15.6.2010 SEC(2010) 744 final

The documents follow an established pattern, now based on Article 126 TFEU. The Commission reports the conclusion that an excessive deficit exists (in Denmark), it proposes that the Council confirms the existence, and it makes a recommendation to the Council on the corrective measures to recommend to the country.

Ralf Grahn