Recommendation for a Council Decision abrogating Decision 2008/713/EC on the existence of an excessive deficit in the United Kingdom

Background information:

The United Kingdom was subject to an excessive deficit procedure since July 2008, when the Council called for its deficit to be corrected by the 2009-10 financial year. However the 2008 economic downturn, as well as stimulus measures adopted in response to the downturn, led to a substantial deterioration in the UK's budgetary position.

In April 2009, the Council extended the deadline for correcting the deficit by four years, to the 2013-14 financial year. In December 2009 it extended it by an additional year, to 2014-15, in the light of unexpected adverse events. In June 2015, the Council granted the UK a further two years to correct its deficit. Over the period, the Council found twice, in April 2009 and June 2015, that the UK had not taken effective action in response to its recommendations. But as the UK is not in the eurozone, fines could not be imposed.

In its autumn 2017 economic forecast, the European Commission projects deficits of 2.5% of GDP in 2017-18, 1.8% of GDP in 2018-19 and 1.3% of GDP in 2019-20, on the basis of a no-policy-change assumption. The UK's deficit was therefore set to remain below the 3% of GDP reference value over the forecast horizon. The Council therefore concluded that the UK's deficit hasd been corrected and that its July 2008 decision should therefore be abrogated.

The European Commission adopted on 22 November 2017 a Recommendation for a Council Decision abrogating Decision 2008/713/EC on the existence of an excessive deficit in the United Kingdom.

The Council of the European Union closed the excessive deficit procedure for the United Kingdom on 5 December 2017, confirming that its government deficit had dropped below the EU’s 3% of GDP reference value.

• Primary Source

Council of the European Union: Press Release, 05.12.17: UK’s deficit back below 3% of GDP, Council closes procedure http://www.consilium.europa.eu/en/press/press-releases/2017/12/05/uk-s-deficit-back-below-3percent-of-gdp-council-closes-procedure/

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