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17.3.2012 Official
Journal
of
the
European
Union L
78/19
COUNCIL IMPLEMENTING DECISION
of 13 March 2012
suspending commitments from the Cohesion Fund for Hungary with effect from 1 January 2013
(2012/156/EU)
THE COUNCIL OF THE EUROPEAN UNION,
Union and to the TFEU, the Member States agreed that
the Cohesion Fund will provide Union financial
contributions to projects in the fields of environment
Having regard to the Treaty on the Functioning of the European
and trans-European networks in Member States with a
Union,
per capita GNP of less than 90 % of the Union average
which have a programme leading to the fulfilment of the
conditions of economic convergence as set out in
Having regard to Council Regulation (EC) No 1084/2006 of
Article 126 TFEU.
11 July 2006 establishing a Cohesion Fund and repealing Regu

lation (EC) No 1164/94 ( 1 ), and in particular Article 4 thereof,
(7) Article
4
of
Regulation
(EC)
No
1084/2006
sets
out
conditions applicable to Cohesion Fund assistance and
Having regard to the proposal from the European Commission,
makes access to financial assistance from the Cohesion
Fund conditional on the avoidance of an excessive
government deficit as set out in Article 126 TFEU (
Whereas:

2 ).

Under Article 4(1) of Regulation (EC) No 1084/2006
the Council may decide, on a proposal from the
(1)
Article 174 of the Treaty on the Functioning of the
Commission, to suspend either the totality or part of
European Union (TFEU) calls for the Union to develop
the commitments from the Cohesion Fund for a bene
and pursue its actions leading to the strengthening of its
ficiary Member State if: (i) the Council has decided in
economic, social and territorial cohesion in order to
accordance with Article 126(6) TFEU ( 3 ) that excessive
promote its overall harmonious development.
government deficit exists in the Member State concerned;
and (ii) the Council has established in accordance with
Article 126(8) TFEU ( 4 ) that the Member State concerned
(2) In
accordance
with
Article
175
TFEU,
Member
States
are
has not taken effective action in response to a Council
to conduct their economic policies and coordinate them
recommendation under Article 126(7) TFEU ( 5 ) to correct
in such a way as to attain the objectives set out in
the excessive government deficit by the established
Article 174 TFEU. The formulation and implementation
deadline. Such suspension of commitments should be
of the Union’s policies and actions and the implemen
effective from 1 January of the year following the
tation of the internal market also have to take into
decision to suspend.
account the objectives set out in Article 174 TFEU and
contribute to their achievement.
(8) On
5
July
2004,
by
Decision
2004/918/EC
( 6 ) the
Council decided in accordance with Article 104(6) of
(3) Article
121(3)
TFEU
calls
upon
the
Council
to
monitor
the Treaty establishing the European Community (TEC)
economic developments in each of the Member States
that an excessive deficit existed in Hungary. The Council
and in the Union in order to ensure closer coordination
adopted a first recommendation on 5 July 2004, a
of economic policies and sustained convergence of the
second recommendation on 8 March 2005 and a third
economic performances of Member States and to ensure
recommendation on 10 October 2006 addressed to
consistency of economic policies with the broad
Hungary in accordance with Article 104(7) TEC. On
guidelines of the economic policies of the Member
7 July 2009 the Council adopted its fourth recommen
States and of the Union.
dation to Hungary in accordance with Article 104(7) TEC
(‘Council Recommendation of 7 July 2009’) with a view
to bringing an end to the situation of an excessive
(4) In
accordance
with
Article
126
TFEU,
Member
States
are
government deficit by 2011 at the latest. Specifically,
to avoid excessive government deficits.
Hungary was recommended: (i) to limit the deterioration
of the fiscal position in 2009 by ensuring a rigorous
implementation of the adopted and announced corrective
(5) In
accordance
with
Article
177
TFEU,
the
European
measures to respect the target of 3,9 % of GDP;
Parliament and the Council are to define the tasks,
(ii) starting from 2010, to implement rigorously the
priority objectives and the organisation of the Cohesion
Fund which provides a financial contribution to projects
( 2 ) Replacing Article 104 of the Treaty establishing the European
in the fields of environment and trans-European
Community (TEC) as referred to in Article 4 of Regulation (EC)
networks in the area of transport infrastructure.
No 1084/2006.
( 3 ) Replacing Article 104(6) TEC as referred to in Article 4 of
Regulation (EC) No 1084/2006.
(6)
In the Protocol (No 28) on economic, social and terri
( 4 ) Replacing Article 104(8) TEC as referred to in Article 4 of
torial cohesion, annexed to the Treaty on European
Regulation (EC) No 1084/2006.
( 5 ) Replacing Article 104(7) TEC as referred to in Article 4 of
Regulation (EC) No 1084/2006.
( 1 ) OJ L 210, 31.7.2006, p. 79.
( 6 ) OJ L 389, 30.12.2004, p. 27.

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L 78/20
EN
Official Journal of the European Union
17.3.2012
necessary consolidation measures to ensure a continued
the Member State concerned. Accordingly, it is appro
reduction of the structural deficit and a renewed decline
priate, in case of a first application of Article 4(1) of
of the headline deficit, with an increased reliance on
Regulation (EC) No 1084/2006 to a given Member
structural measures, in order to guarantee a lasting
State, to set the amount at 50 % of the allocation of
improvement of public finances; (iii) to spell out and
cohesion funds for 2013, without exceeding a
adopt in a timely manner the consolidation measures
maximum level of 0,5 % of the nominal GDP of the
necessary to achieve the correction of the excessive
Member State concerned as forecast by the Commission
deficit by 2011; (iv) to ensure a cumulative 0,5 % of
services.
GDP fiscal effort over 2010 and 2011; and (v) to
ensure that the government gross debt ratio was
brought onto a firm downward trajectory.
(11) Since
the
suspension
concerns
only
commitments,
the
implementation of transport and environment projects
or commitments already made at the time of suspension
(9) On
24
January
2012
the
Council
adopted
Decision
will not be compromised if the necessary corrective
2012/139/EU ( 1 ) in accordance with Article 126(8)
actions are promptly implemented. By suspending
TFEU establishing that Hungary had not taken effective
commitments taking effect as of the following year, the
action in response to the Council Recommendation of
ongoing project implementation will not be affected for
7 July 2009. The Decision noted that while Hungary
an extended period, giving the authorities the necessary
formally respected the 3 % of GDP reference value by
time to adopt measures that would restore macro
2011, this was not based on a structural and sustainable
economic and fiscal conditions conductive to sustainable
correction. The budget surplus in 2011 hinged upon
growth and employment.
substantial one-off revenues of over 10 % of GDP and
was accompanied by a cumulative structural deterioration
in 2010 and 2011 of 2,75 % of GDP compared to a
(12) In accordance with Article 4(2) of Regulation (EC)
recommended cumulative fiscal improvement of 0,5 %
No 1084/2006, if by 22 June 2012, or at a later date,
of GDP. Moreover, while the authorities intend to
the Council establishes that Hungary has taken the
implement substantial structural measures in 2012
necessary corrective action, it will decide, without delay,
reducing the structural deficit to 2,6 % of GDP, the 3 %
to lift the suspension of the commitments concerned,
of GDP reference value would again be respected only
thanks to one-off measures of close to 1 % of GDP.
Finally, in 2013, the deficit (at 3,25 % of GDP) was
HAS ADOPTED THIS DECISION:
expected to exceed the reference value in the TFEU
once more even after taking into account additional
Article 1
measures announced since the Commission services’
2011 autumn forecast. The higher deficit in 2013
The amount of EUR 495 184 000 (in current prices) of
would mainly be linked to the fact that temporary one-
commitments from the Cohesion Fund for Hungary shall be
off revenues were being phased out as planned, while not
suspended with effect from 1 January 2013.
all planned structural reforms had been sufficiently spec
ified. Overall, the Council concluded that the response by
the Hungarian authorities to the Council Recommen
Article 2
dation of 7 July 2009 pursuant to Article 126(7) TFEU
This Decision shall take effect on the day of its notification.
had been insufficient.
Article 3
(10) Therefore, in the case of Hungary, the two conditions set
out in Article 4(1) of Regulation (EC) No 1084/2006
This Decision is addressed to Hungary.
have been fulfilled. The Council, on a proposal of the
Commission, may thus suspend either the totality or part
of the commitments from the Cohesion Fund with effect
Done at Brussels, 13 March 2012.
from 1 January 2013. The decision on the amount of
commitments to be suspended should ensure that the
suspension is both effective and proportionate, whilst
For the Council
taking into account the current overall economic
situation in the European Union and the relative
The President
importance of the Cohesion Fund for the economy of
M. VESTAGER
( 1 ) OJ L 66, 6.3.2012, p. 6.

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