EC Recommends Abrogation of Excessive Deficit Procedure Against Bulgaria
The European Commission said it recommended that the Council of the European Union abrogate the excessive deficit procedure regarding Bulgaria.
In March this year, Bulgaria notified that its 2011 general government deficit fell below 3.0% of gross domestic product (GDP), the European Commission (EC) said in a press release published on its website on Wednesday.
"Following the validation of these figures by Eurostat on 23 April 2012, and also taking into account the fact that the Commissions' 2012 spring forecast [...] shows that these deficits will remain durably below 3% of GDP, the Commission has concluded that the correction of the excessive deficit for these countries [Bulgaria and Germany] is ensured," it added.
Bulgaria reduced its general government deficit to 2.1% last year from 3.1% of GDP in 2010. According to the EC's 2012 spring forecast, its deficit is expected to shrink further to 1.9% this year and to 1.7% in 2013.
The excessive deficit procedure (EDP) is part of EU's Stability and Growth Pact and its objective is to correct deviations from sound budgetary policies in the member states. There are two key reference values which, if breached, can trigger the opening of an EDP: one for the general government deficit (3.0% of GDP) and another one for gross government debt (60% of GDP).
Once an EDP is opened for a country, the Council of the European Union, on the basis of a recommendation from the EC, issues recommendations which define the size of the fiscal adjustment to be delivered and the deadline by which the excessive government deficit must be corrected.
Currently, 23 out of the 27 EU member states are subject to an EDP.