HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 165/46
EN
Official Journal of the European Union
26.6.2012
COUNCIL IMPLEMENTING DECISION
of 22 June 2012
lifting the suspension of commitments from the Cohesion Fund for Hungary
(2012/323/EU)
THE COUNCIL OF THE EUROPEAN UNION,
(4) On
13
March
2012,
by
Implementing
Decision
2012/156/EU suspending commitments from the
Cohesion Fund for Hungary with effect from 1 January
Having regard to the Treaty on the Functioning of the European
2013 ( 4 ), the Council decided to suspend part of the
Union,
commitments from the Cohesion Fund with effect
from 1 January 2013 in accordance with Article 4 of
Regulation (EC) No 1084/2006. The decision on the
Having regard to Council Regulation (EC) No 1084/2006 of
amount of Cohesion Fund commitments to be
11 July 2006 establishing a Cohesion Fund ( 1 ), and in particular
suspended aimed to ensure that the suspension was
Article 4(2) thereof,
both effective and proportionate, whilst taking into
account the current overall economic situation in the
Union and the relative importance of the Cohesion
Having regard to the proposal from the European Commission,
Fund for the economy of the Member State concerned.
The Council considered appropriate, in the case of a first
Whereas:
application of Article 4(1) of Regulation (EC)
No 1084/2006 to a given Member State, namely
Hungary, to set the amount at 50 % of the allocation
(1) Article
4
of
Regulation
(EC)
No
1084/2006
sets
out
the
of the Cohesion Fund for 2013, without exceeding the
conditions applying to access to Cohesion Fund
maximum level of 0,5 % of the nominal GDP of that
assistance. According to paragraph 1 of that Article,
Member State as forecast by the Commission services.
the Council may decide to suspend either the totality
Accordingly, the Council decided to suspend
or part of the commitments from the Cohesion Fund
EUR 495 184 000 commitments from the Cohesion
for the Member State concerned with effect from 1
Fund for Hungary with effect from 1 January 2013.
January of the year following the decision to suspend if
it has been established in accordance with Article 126(8)
of the Treaty on the Functioning of the European Union
(5) Also
on
13
March,
the
Council
issued
a
revised
recom
("TFEU") that the Member State concerned has not taken
mendation to Hungary in accordance with Article 126(7)
effective action in response to a Council recommendation
TFEU ("Council Recommendation of 13 March 2012"),
made under Article 126(7) TFEU.
setting 2012 as the deadline for bringing the situation of
an excessive government deficit to an end. Specifically,
Hungary was recommended to undertake an additional
(2) On
5
July
2004,
by
Decision
2004/918/EC
on
the
fiscal effort of at least % of GDP, based on the further
existence of an excessive deficit in Hungary (
specification and implementation of consolidation

2 ) the
Council decided in accordance with Article 104(6) of
measures of a structural nature, to ensure the attainment
the Treaty establishing the European Community
of the 2012 deficit target of 2,5 % of GDP; allocate
("TEC") that an excessive deficit existed in Hungary.
possible windfall gains for improving the headline
The Council adopted a first recommendation on 5 July
balance; take necessary additional measures of a
2004, a second recommendation on 8 March 2005, and
structural nature as needed to ensure that the deficit
a third recommendation on 10 October 2006, all of
in 2013 remains well below the 3 % of GDP threshold;
which were addressed to Hungary in accordance with
and incorporate sufficient reserve provisions in the forth
Article 104(7) TEC. On 7 July 2009, the Council
coming budget laws. At the same time, the Council
adopted its fourth such recommendation ("Council
underlined that the budgetary adjustment should
Recommendation of 7 July 2009"), with a view to
contribute to bringing the government debt ratio onto
bringing an end to the situation of an excessive
a declining path and that it also needed to be supported
government deficit by 2011 at the latest.
by the proposed improvements in the fiscal governance
framework.
(3) On
24
January
2012,
the
Council
adopted
Decision
2012/139/EU establishing whether effective action has
(6) On
23
April
2012,
Hungary
submitted
the
annual
update
been taken by Hungary in response to the Council
of its convergence programme outlining its budgetary
recommendation of 7 July 2009 (
strategy to ensure the sustainable correction of the

3 ) in accordance with
Article 126(8) TFEU, establishing that Hungary had not
excessive deficit by the 2012 deadline. The official
taken effective action to correct the excessive government
deficit targets and the planned fiscal efforts comply
deficit in response to the Council Recommendation of
with the Council Recommendation of 13 March 2012.
7 July 2009 within the period laid down therein.
The programme confirms the previous medium-term
objective of 1,5 % of GDP, which it plans to achieve
by 2013. According to the update, the public debt is
( 1 ) OJ L 210, 31.7.2006, p. 79.
( 2 ) OJ L 389, 30.12.2004, p. 27.
( 3 ) OJ L 66, 6.3.2012, p. 6.
( 4 ) OJ L 78, 17.3.2012, p. 19.

---

EN
26.6.2012 Official
Journal
of
the
European
Union L
165/47
being continuously reduced throughout the programme
13 March 2012 to correct the excessive deficit by the
period to 77 % of GDP in 2013 and below 73 % of GDP
deadline set by the Council. Therefore, Implementing
in 2015. As regards fiscal governance reform, the auth
Decision 2012/156/EU suspending part of the
orities have announced that they will submit to the
commitments from the Cohesion Fund should be
Parliament the necessary amendments during the Spring
abrogated.
session.
(7) Based
on
publicly
available
information,
the
Commission (9) If,
at
any
moment
in
time
before
the
abrogation
of
the
concluded in its Communication of 30 May 2012 that
decision on the existence of an excessive deficit in
Hungary has taken the necessary corrective action, repre
accordance with Article 126(12) TFEU, action taken is
senting adequate progress towards the correction of the
proving to be inadequate, the Council should, based on a
excessive deficit. In particular, the budget deficit is
recommendation by the Commission, adopt a new
expected to reach 2,5 % of GDP in 2012 and remain
Decision under Article 126(8) TFEU. In such a case, it
well below the 3 % of GDP reference value in 2013, as
may, on a proposal by the Commission, adopt a decision
recommended by the Council in March. Specifically,
to suspend Cohesion Fund commitments,
taking also into account all publicly available information
provided by the Government since mid-March, the 2013
HAS ADOPTED THIS DECISION:
deficit is foreseen by the Commission services to reach
2,7 % of GDP. Considering also the effect of revisions to
potential GDP growth and the projected deviation from
Article 1
standard tax elasticities, the fiscal effort in 2012 can be
considered to be broadly in line with what was required.
The partial suspension of commitments from the Cohesion
The use of windfall revenues and the incorporation of
Fund for Hungary laid down in Implementing Decision
sufficient reserve provisions in the forthcoming budgets
2012/156/EU is hereby lifted.
have yet to be demonstrated. Based on the Spring 2012
forecast, the general government debt is expected to
decrease to 78,5 % of GDP in 2012 and slightly
Article 2
further in 2013. Finally, some progress has been made
This Decision is addressed to Hungary.
on enhancing the fiscal governance framework, but
important reforms are still to be designed and adopted
before the end of the Spring session of Parliament.
Against this background and also in light of the recent
Done at Luxembourg, 22 June 2012.
worse-than-expected first quarter growth data, the
Commission will continue to closely monitor budgetary
developments in Hungary.
For the Council
(8) Overall,
Hungary
has
taken
the
necessary
corrective
The President
action in response to the Council Recommendation of
M. VESTAGER

---

Document Outline

• �

---