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23.11.2011 Official
Journal
of
the
European
Union
L
306/1
I
(Legislative acts)
REGULATIONS
REGULATION (EU) No 1173/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 16 November 2011
on the effective enforcement of budgetary surveillance in the euro area
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
need for improved economic governance in the Union,
EUROPEAN UNION,
which should be built on stronger national ownership of
commonly agreed rules and policies and on a more
robust framework at the level of the Union for the
Having regard to the Treaty on the Functioning of the European
surveillance of national economic policies.
Union, and in particular Article 136, in combination with
Article 121(6) thereof,
Having regard to the proposal from the European Commission,
(4) The
improved
economic
governance
framework
should
rely on several interlinked and coherent policies for
sustainable growth and jobs, in particular a Union
After transmission of the draft legislative act to the national
strategy for growth and jobs, with particular focus on
parliaments,
developing and strengthening the internal market,
fostering international trade and competitiveness, a
European Semester for strengthened coordination of
Having regard to the opinion of the European Central Bank ( 1 ),
economic and budgetary policies, an effective
framework for preventing and correcting excessive
government deficits (the Stability and Growth Pact
Having regard to the opinion of the European Economic and
(SGP)), a robust framework for preventing and correcting
Social Committee ( 2 ),
macroeconomic imbalances, minimum requirements for
national budgetary frameworks, and enhanced financial
market regulation and supervision, including macropru
Acting in accordance with the ordinary legislative procedure ( 3 ),
dential supervision by the European Systemic Risk Board.
Whereas:
(5) The
SGP
and
the
complete
economic
governance
(1) Member
States
whose
currency
is
the
euro
have
a
framework should complement and be compatible with
particular interest in and a responsibility to conduct
the Union strategy for growth and jobs. The interlinks
economic policies that promote the proper functioning
between different strands should not provide for
of the economic and monetary union and to avoid
exemptions from the provisions of the SGP.
policies that jeopardise that functioning.
(2) The
Treaty
on
the
Functioning
of
the
European
Union (6) Achieving
and
maintaining
a
dynamic
internal
market
(TFEU) allows the adoption of specific measures in the
should be considered an element of the proper and
euro area which go beyond the provisions applicable to
smooth functioning of the economic and monetary
all Member States, for the purpose of ensuring the proper
union.
functioning of the economic and monetary union.
(3)
Experience gained and mistakes made during the first
decade of the economic and monetary union show a
(7) The
Commission
should
play
a
stronger
role
in
the
enhanced surveillance procedure as regards assessments
that are specific to each Member State, monitoring, on-
( 1 ) OJ C 150, 20.5.2011, p. 1.
site missions, recommendations and warnings. When
( 2 ) OJ C 218, 23.7.2011, p. 46.
taking decisions on sanctions, the role of the Council
( 3 ) Position of the European Parliament of 28 September 2011 (not yet
published in the Official Journal) and decision of the Council of
should be limited, and reversed qualified majority
8 November 2011.
voting should be used.

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Official Journal of the European Union
23.11.2011
(8) In order to ensure a permanent dialogue with the
(15) Sanctions
under
this
Regulation
and
based
upon
the
Member States aiming at achieving the objectives of
preventive part of the SGP in respect of Member States
this Regulation, the Commission should carry out
whose currency is the euro should provide incentives for
surveillance missions.
adjusting to and maintaining the medium-term budgetary
objective.
(9) A
broad
evaluation
of
the
economic
governance
system,
in particular of the effectiveness and adequacy of its
sanctions, should be undertaken by the Commission at
(16) In
order
to
deter
against
the
misrepresentation,
whether
regular intervals. Such evaluations should be comple
intentional or due to serious negligence, of government
mented by relevant proposals if necessary.
deficit and debt data, which data is an essential input to
economic policy coordination in the Union, fines should
be imposed on Member States responsible.
(10) When
implementing
this
Regulation,
the
Commission
should take into account the current economic
situation of the Member States concerned.
(17) In
order
to
supplement
the
rules
on
calculation
of
the
fines for manipulation of statistics as well as the rules on
(11) The strengthening of economic governance should
the procedure to be followed by the Commission for the
include a closer and a more timely involvement of the
investigation of such actions, the power to adopt acts in
European Parliament and the national parliaments.
accordance with Article 290 TFEU should be delegated to
the Commission in respect of detailed criteria for estab
lishing the amount of the fine and for conducting the
Commission’s investigations. It is of particular
(12) An
economic
dialogue
with
the
European
Parliament
importance that the Commission carry out appropriate
may be established, enabling the Commission to make
consultations during its preparatory work, including at
its analyses public and the President of the Council, the
expert level. The Commission, when preparing and
Commission and, where appropriate, the President of the
drawing up delegated acts, should ensure a simultaneous,
European Council or the President of the Eurogroup to
timely and appropriate transmission of relevant
discuss. Such a public debate could enable discussion of
documents to the European Parliament and the Council.
the spill-over effects of national decisions and enable
public peer pressure to be brought to bear on the
relevant actors. While recognising that the counterparts
of the European Parliament in the framework of that
dialogue are the relevant institutions of the Union and
(18) In respect of the preventive part of the SGP, adjustment
their representatives, the competent committee of the
and adherence to the medium-term budgetary objective
European Parliament may offer an opportunity to
should be ensured through an obligation imposed on a
participate in an exchange of views to a Member State
Member State whose currency is the euro that is making
which is the subject of a Council decision taken pursuant
insufficient progress with budgetary consolidation to
to Articles 4, 5 and 6 of this Regulation. The Member
lodge temporarily an interest-bearing deposit. This
State’s participation in such an exchange of views is
should be the case when a Member State, including a
voluntary.
Member State with a deficit below the 3 % of Gross
Domestic Product (GDP) reference value, deviates
significantly from the medium-term budgetary objective
or the appropriate adjustment path towards that
(13) Additional sanctions are necessary to make the
objective and fails to correct the deviation.
enforcement of budgetary surveillance in the euro area

more effective. Those sanctions should enhance the credi
bility of the fiscal surveillance framework of the Union.
(19) The
interest-bearing
deposit
imposed
should
be
released
to the Member State concerned together with the interest
(14) The
rules
laid
down
in
this
Regulation
should
ensure
fair,
timely, graduated and effective mechanisms for
accrued on it once the Council has been satisfied that the
compliance with the preventive and the corrective parts
situation giving rise to the obligation to lodge that
of the SGP, in particular Council Regulation (EC)
deposit has come to an end.
No 1466/97 of 7 July 1997 on the strengthening of
the surveillance of budgetary positions and the
surveillance and coordination of economic policies ( 1 )
and Council Regulation (EC) No 1467/97 of 7 July
(20) In respect of the corrective part of the SGP, sanctions for
1997 on speeding up and clarifying the implementation
Member States whose currency is the euro should take
of the excessive deficit procedure ( 2 ), where compliance
the form of an obligation to lodge a non-interest-bearing
with the budgetary discipline is examined on the basis of
deposit linked to a Council decision establishing the
the government deficit and government debt criteria.
existence of an excessive deficit if an interest-bearing
deposit has already been imposed on the Member State
( 1 ) OJ L 209, 2.8.1997, p. 1.
concerned in the preventive part of the SGP or in cases
( 2 ) OJ L 209, 2.8.1997, p. 6.
of particularly serious non-compliance with the

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23.11.2011 Official
Journal
of
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European
Union
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budgetary policy obligations laid down in the SGP, or the
conducted within the Council as provided for in
obligation to pay a fine in the event of non-compliance
Article 121(1) TFEU, those individual decisions are an
with a Council recommendation to correct an excessive
integral follow-up to the measures adopted by the
government deficit.
Council in accordance with Articles 121 and 126 TFEU
and Regulations (EC) No 1466/97 and (EC) No 1467/97.
(21) In
order to avoid the retroactive
application
of the
(26) Since
this Regulation contains general rules for the
sanctions under the preventive part of the SGP
effective enforcement of Regulations (EC) No 1466/97
provided for in this Regulation, they should apply only
and (EC) No
1467/97, it should be adopted in
in respect of the relevant decisions adopted by the
accordance with the ordinary legislative procedure
Council under Regulation (EC) No 1466/97 after the
referred to in Article 121(6) TFEU.
entry into force of this Regulation. Similarly, in order
to avoid the retroactive application of the sanctions
under the corrective part of the SGP provided for in
(27) Since
the
objective
of
this
Regulation,
namely
to
create
a
this Regulation, they should apply only in respect of
system of sanctions for enhancing the enforcement of the
the relevant recommendations and decisions to correct
preventive and corrective parts of the SGP in the euro
an excessive government deficit adopted by the Council
area, cannot be sufficiently achieved at the level of the
after the entry into force of this Regulation.
Member States, the Union may adopt measures in
accordance with the principles of subsidiarity as set out
in Article 5 of the Treaty on European Union (TEU). In
accordance with the principle of proportionality, as set
(22) The amount of the interest-bearing deposits, of the non-
out in that Article, this Regulation does not go beyond
interest-bearing deposits and of the fines provided for in
what is necessary in order to achieve that objective,
this Regulation should be set in such a way as to ensure
a fair graduation of sanctions in the preventive and
corrective parts of the SGP and to provide sufficient
HAVE ADOPTED THIS REGULATION:
incentives for the Member States whose currency is the
euro to comply with the fiscal framework of the Union.
Fines under Article 126(11) TFEU and as specified in
CHAPTER I
Article 12 of Regulation (EC) No
1467/97 are
SUBJECT MATTER, SCOPE AND DEFINITIONS
composed of a fixed component that equals 0,2 % of
GDP and of a variable component. Thus, graduation
Article 1
and equal treatment between Member States are
ensured if the interest-bearing deposit, the non-interest-
Subject matter and scope
bearing deposit and the fine specified in this Regulation
1. This
Regulation
sets
out
a
system
of
sanctions
for
are equal to 0,2 % of GDP, that being the amount of the
enhancing the enforcement of the preventive and corrective
fixed component of the fine under Article 126(11) TFEU.
parts of the Stability and Growth Pact in the euro area.
2. This
Regulation
shall
apply
to
Member
States
whose
(23) A
possibility
should
be
provided
for
the
Council
to
currency is the euro.
reduce or to cancel the sanctions imposed on Member
States whose currency is the euro on the basis of a
Commission recommendation following a reasoned
Article 2
request by the Member State concerned. In the corrective
part of the SGP, the Commission should also be able to
Definitions
recommend reducing the amount of a sanction or
For the purposes of this Regulation, the following definitions
cancelling it on grounds of exceptional economic circum
apply:
stances.
(1) ‘preventive part of the Stability and Growth Pact’ means the
multilateral surveillance system as organised by Regulation
(24) The
non-interest-bearing
deposit
should
be
released
upon
(EC) No 1466/97;
correction of the excessive deficit, while the interest on
such deposits and the fines collected should be assigned
to stability mechanisms to provide financial assistance,
(2) ‘corrective part of the Stability and Growth Pact’ means the
created by Member States whose currency is the euro
procedure for the avoidance of Member States’ excessive
in order to safeguard the stability of the euro area as a
deficit as regulated by Article 126 TFEU and Regulation
whole.
(EC) No 1467/97;
(3) ‘exceptional economic circumstances’ means circumstances
(25) The
power
to
adopt
individual
decisions
for
the
appli
where an excess of a government deficit over the reference
cation of the sanctions provided for in this Regulation
value is considered exceptional within the meaning of the
should be conferred on the Council. As part of the coor
second indent of point (a) of Article 126(2) TFEU and as
dination of the economic policies of the Member States
specified in Regulation (EC) No 1467/97.

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CHAPTER II
of Regulation (EC) No 1466/97 no longer exists, the Council,
on the basis of a further recommendation from the
ECONOMIC DIALOGUE
Commission, shall decide that the deposit and the interest
Article 3
accrued thereon be returned to the Member State concerned.
The Council may, acting by a qualified majority, amend the
Economic dialogue
Commission’s further recommendation.
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
CHAPTER IV
accountability, the competent committee of the European
SANCTIONS IN THE CORRECTIVE PART OF THE STABILITY
Parliament may invite the President of the Council, the
AND GROWTH PACT
Commission and, where appropriate, the President of the
European Council or the President of the Eurogroup to
Article 5
appear before the committee to discuss decisions taken
Non-interest-bearing deposits
pursuant to Articles 4, 5 and 6 of this Regulation.
1. If
the
Council,
acting
under
Article
126(6)
TFEU,
decides
that an excessive deficit exists in a Member State which has
The competent committee of the European Parliament may
lodged an interest-bearing deposit with the Commission in
offer the opportunity to the Member State concerned by such
accordance with Article 4(1) of this Regulation, or where the
decisions to participate in an exchange of views.
Commission has identified particularly serious non-compliance
with the budgetary policy obligations laid down in the SGP, the
Commission shall, within 20 days of adoption of the Council’s
CHAPTER III
decision, recommend that the Council, by a further decision,
require the Member State concerned to lodge with the
SANCTIONS IN THE PREVENTIVE PART OF THE STABILITY
Commission a non-interest-bearing deposit amounting to
AND GROWTH PACT
0,2 % of its GDP in the preceding year.
Article 4
Interest-bearing deposits
2. The
decision
requiring
a
lodgement
shall
be
deemed
to
be
1. If
the
Council
adopts
a
decision
establishing
that
a adopted by the Council unless it decides by a qualified majority
Member State failed to take action in response to the Council
to reject the Commission’s recommendation within 10 days of
recommendation referred to in the second subparagraph of
the Commission’s adoption thereof.
Article 6(2) of Regulation (EC) No 1466/97, the Commission
shall, within 20 days of adoption of the Council’s decision,
recommend that the Council, by a further decision, require
3. The
Council,
acting
by
a
qualified
majority,
may
amend
the Member State in question to lodge with the Commission
the Commission’s recommendation and adopt the text so
an interest-bearing deposit amounting to 0,2 % of its GDP in
amended as a Council decision.
the preceding year.
4. The Commission may,
on grounds of exceptional
2. The
decision
requiring
a
lodgement
shall
be
deemed
to
be economic circumstances or following a reasoned request by
adopted by the Council unless it decides by a qualified majority
the Member State concerned addressed to the Commission
to reject the Commission’s recommendation within 10 days of
within 10 days of adoption of the Council’s decision under
the Commission’s adoption thereof.
Article 126(6) TFEU referred to in paragraph 1, recommend
that the Council reduce the amount of the non-interest-
bearing deposit or cancel it.
3. The
Council,
acting
by
a
qualified
majority,
may
amend
the Commission’s recommendation and adopt the text so
amended as a Council decision.
5. The
deposit
shall
be
lodged
with
the
Commission.
If
the
Member State has lodged an interest-bearing deposit with the
Commission in accordance with Article 4, that interest-bearing
4. The
Commission
may,
following
a
reasoned
request
by
the deposit shall be converted to a non-interest-bearing deposit.
Member State concerned addressed to the Commission within
10 days of adoption of the Council’s decision establishing that a
Member State failed to take action referred to in paragraph 1,
If the amount of an interest-bearing deposit lodged in
recommend that the Council reduce the amount of the interest-
accordance with Article 4 and of the interest accrued thereon
bearing deposit or cancel it.
exceeds the amount of the non-interest-bearing deposit to be
lodged under paragraph 1 of this Article, the excess shall be
returned to the Member State.
5. The
interest-bearing
deposit
shall
bear
an
interest
rate
reflecting the Commission’s credit risk and the relevant
investment period.
If the amount of the non-interest-bearing deposit exceeds the
amount of an interest-bearing deposit lodged in accordance
with Article 4 and the interest accrued thereon, the Member
6. If
the
situation
giving
rise
to
the
Council’s
recommen
State shall make up the shortfall when it lodges the non-
dation referred to in the second subparagraph of Article 6(2)
interest-bearing deposit.

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Article 6
that intentionally or by serious negligence misrepresents deficit
and debt data relevant for the application of Articles 121 or
Fines
126 TFEU, or for the application of the Protocol on the
1. If
the
Council,
acting
under
Article
126(8)
TFEU,
decides excessive deficit procedure annexed to the TEU and to the
that a Member State has not taken effective action to correct its
TFEU.
excessive deficit, the Commission shall, within 20 days of that
decision, recommend that the Council, by a further decision,
impose a fine, amounting to 0,2 % of the Member State’s GDP
in the preceding year.
2. The
fines
referred
to
in
paragraph
1
shall
be
effective,
dissuasive and proportionate to the nature, seriousness and
duration of the misrepresentation. The amount of the fine
2. The
decision
imposing
a
fine
shall
be
deemed
to
be shall not exceed 0,2 % of GDP of the Member State concerned.
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.
3. The
Commission
may
conduct
all
investigations
necessary
to establish the existence of the misrepresentations referred to
in paragraph 1. It may decide to initiate an investigation when
3. The
Council,
acting
by
a
qualified
majority,
may
amend it finds that there are serious indications of the existence of facts
the Commission’s recommendation and adopt the text so
liable to constitute such a misrepresentation. The Commission
amended as a Council decision.
shall investigate the putative misrepresentations taking into
account any comments submitted by the Member State
concerned. In order to carry out its tasks, the Commission
4. The
Commission may,
on grounds of exceptional may request the Member State to provide information, and
economic circumstances or following a reasoned request by
may conduct on-site inspections and accede to the accounts
the Member State concerned addressed to the Commission
of all government entities at central, state, local and social-
within 10 days of adoption of the Council’s decision under
security level. If the law of the Member State concerned
Article 126(8) TFEU referred to in paragraph 1, recommend
requires prior judicial authorisation for on-site inspections, the
that the Council reduce the amount of the fine or cancel it.
Commission shall make the necessary applications.
5. If
the
Member
State
has
lodged
a
non-interest-bearing
deposit with the Commission in accordance with Article 5,
Upon completion of its investigation, and before submitting any
the non-interest-bearing deposit shall be converted into the fine.
proposal to the Council, the Commission shall give to the
Member State concerned the opportunity of being heard in
relation to the matters under investigation. The Commission
If the amount of a non-interest-bearing deposit lodged in
shall base any proposal to the Council only on facts on
accordance with Article 5 exceeds the amount of the fine, the
which the Member State concerned has had the opportunity
excess shall be returned to the Member State.
to comment.
If the amount of the fine exceeds the amount of a non-interest-
The Commission shall fully respect the rights of defence of the
bearing deposit lodged in accordance with Article 5, or if no
Member State concerned during the investigations.
non-interest-bearing deposit has been lodged, the Member State
shall make up the shortfall when it pays the fine
4. The
Commission
shall
be
empowered
to
adopt
delegated
Article 7
acts in accordance with Article 11 concerning:
Return of non-interest-bearing deposits
If the Council, acting under Article 126(12) TFEU, decides to
abrogate some or all of its decisions, any non-interest-bearing
(a) detailed criteria establishing the amount of the fine referred
deposit lodged with the Commission shall be returned to the
to in paragraph 1;
Member State concerned.
(b) detailed rules concerning the procedures for the investi
CHAPTER V
gations referred to in paragraph 3, the associated
SANCTIONS CONCERNING THE MANIPULATION OF
measures and the reporting on the investigations;
STATISTICS
Article 8
Sanctions concerning the manipulation of statistics
(c) detailed rules of procedure aimed at guaranteeing the rights
of the defence, access to the file, legal representation, confi
1. The
Council,
acting
on
a
recommendation
by
the
dentiality and provisions as to timing and the collection of
Commission, may decide to impose a fine on a Member State
the fines referred to in paragraph 1.

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5. The
Court
of
Justice
of
the
European
Union
shall
have 5. A
delegated
act
adopted
pursuant
to
Article
8(4)
shall
unlimited jurisdiction to review the decisions of the Council
enter into force only if no objection has been expressed
imposing fines under paragraph 1. It may annul, reduce or
either by the European Parliament or the Council within a
increase the fine so imposed.
period of 2 months of notification of that act to the
European Parliament and the Council or if, before the expiry
of that period, the European Parliament and the Council have
CHAPTER VI
both informed the Commission that they will not object. That
period shall be extended by 2 months at the initiative of the
ADMINISTRATIVE NATURE OF THE SANCTIONS AND
European Parliament or of the Council.
DISTRIBUTION OF THE INTEREST AND FINES
Article 9
Administrative nature of the sanctions
Article 12
The sanctions imposed pursuant to Articles 4 to 8 shall be of
Voting in the Council
an administrative nature.
1.
For the measures referred to in Articles 4, 5, 6 and 8, only
members of the Council representing Member States whose
currency is the euro shall vote, and the Council shall act
Article 10
without taking into account the vote of the member of the
Distribution of the interest and fines
Council representing the Member State concerned.
The interest earned by the Commission on deposits lodged in
accordance with Article 5 and the fines collected in accordance
with Articles 6 and 8 shall constitute other revenue, as referred
2. A qualified majority of the members of the Council
to in Article 311 TFEU, and shall be assigned to the European
referred to in paragraph 1 shall be defined in accordance with
Financial Stability Facility. When the Member States whose
point (b) of Article 238(3) TFEU.
currency is the euro create another stability mechanism to
provide financial assistance in order to safeguard the stability
of the euro area as a whole, the interest and the fines shall be
assigned to that mechanism.
Article 13

Review
CHAPTER VII
1. By
14
December
2014
and
every
5
years
thereafter,
the
Commission shall publish a report on the application of this
GENERAL PROVISIONS
Regulation.
Article 11
Exercise of the delegation
That report shall evaluate, inter alia:
1. The
power
to
adopt
delegated
acts
is
conferred
on
the
Commission subject to the conditions laid down in this Article.
(a) the effectiveness of this Regulation, including the possibility
to enable the Council and the Commission to act in order
2. The power to adopt delegated acts referred to in
to address situations which risk jeopardising the proper
Article 8(4) shall be conferred on the Commission for a
functioning of the monetary union;
period of 3 years from 13 December 2011. The Commission
shall draw up a report in respect of the delegation of power not
later than 9 months before the end of that 3-year period. The
delegation of power shall be tacitly extended for periods of an
(b) the progress in ensuring closer coordination of economic
identical duration, unless the European Parliament or the
policies and sustained convergence of economic
Council opposes such extension not later than 3 months
performances of the Member States in accordance with
before the end of each period.
the TFEU.
3. The
delegation
of
power
referred
to
in
Article
8(4)
may
be
revoked at any time by the European Parliament or by the
2. Where appropriate, that report shall be accompanied by a
Council. A decision to revoke shall put an end to the delegation
proposal for amendments to this Regulation.
of the power specified in that decision. It shall take effect the
day following the publication of the decision in the Official
Journal of the European Union or at a later date specified
3. The
report
shall
be
forwarded
to
the
European
Parliament
therein. It shall not affect the validity of any delegated acts
and to the Council.
already in force.
4. As
soon
as
it
adopts
a
delegated
act,
the
Commission
shall 4. Before the end of 2011 the Commission shall present a
notify it simultaneously to the European Parliament and to the
report to the European Parliament and to the Council on the
Council.
possibility of introducing euro-securities.

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Article 14
Entry into force
This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the
European Union.
This Regulation shall be binding in its entirety and directly applicable in the Member States in
accordance with the Treaties.
Done at Strasbourg, 16 November 2011.
For the European Parliament
For the Council
The President
The President
J. BUZEK
W. SZCZUKA

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