05 Dec 2016
DRAFT BUDGETARY PLANS FOR 2017 – 05 DECEMBERBrussels Daily
Eurogroup Statement on the Draft Budgetary Plans for 2017
The Eurogroup welcomes that 18 Member States have submitted Draft Budgetary Plans (DBPs) for 2017 on time. The Commission has provided in-depth individual assessments and Opinions on these, together with an analysis of the budgetary situation in the euro area as a whole. We broadly concur with the Commission’s analysis and opinions. We welcome the work done by independent fiscal institutions within most Member States to endorse or produce forecasts underpinning DBPs. We look forward to the Commission report on transposition of the provisions of the fiscal compact into national laws.
In 2017, the euro area is set to enter its fifth year of economic recovery and all 19 euro area Member States are set to have positive growth rates, even though the pace of the recovery remains uneven. Overall, employment is expected to grow, supporting domestic demand. Many of the preconditions for stronger investment growth are in place and construction investment is set to finally end a long period of weakness. Nevertheless, the economic recovery remains fragile. Weak international trade developments and downside risks in the international economy underline the importance of fostering internal sources of growth.
Years of fiscal consolidation have brought down government deficits in the euro area. The government deficit ratio for the euro area as a whole peaked at 6.3% of GDP in 2009. From 1.8% of GDP in 2016, the ratio is expected to fall further, to 1.5% of GDP in 2017. Based on the assumptions in the autumn forecast, all but one Member State will have deficit ratios below 3% of GDP in 2017. As a result, the aggregate debt-to-GDP ratio in the euro area, which peaked at 94.6% of GDP in 2014, is projected to continue declining, reaching 91.6% of GDP in 2016 and 90.6% of GDP in 2017 and should be brought on a sustained declining path in line with the debt rule. Interest expenditures in the euro area continue to decline. Previous Eurogroup meetings have stressed the need for prudent fiscal policies to build resilience for when interest rates inevitably rise again. Read full statement here