Submission of the national medium-term fiscal-structural plans
1. Each Member State shall submit to the Council and to the Commission a national medium-term fiscal-structural plan by 30 April of the last year of the plan in force. A Member State and the Commission may, where necessary, agree to extend that deadline by a reasonable period.
2. A Member State may ask the relevant independent fiscal institution to issue an opinion on the macroeconomic forecast and the macroeconomic assumptions underpinning the net expenditure path, providing sufficient time for the independent fiscal institution to prepare its opinion.
As of 1 May 2032, the relevant independent fiscal institutions shall issue those opinions, provided that they have built up sufficient capacity. Failure by an independent fiscal institution to issue its opinion within a reasonable timeframe shall not prevent a Member State from submitting its national medium-term fiscal-structural plan. Where available, the opinion of the independent fiscal institution shall be attached to the national medium-term fiscal-structural plan submitted to the Commission.
3. Prior to the submission of its national medium-term fiscal-structural plan, each Member State shall conduct, in accordance with its national legal framework, a consultation of civil society, social partners, regional authorities and other relevant stakeholders.
4. Prior to the submission of its national medium-term fiscal-structural plan, each Member State may debate its draft national medium-term fiscal-structural plan with its national parliament, in accordance with its national legal framework.
5. Each Member State shall make its national medium-term fiscal-structural plan public upon its submission to the Council and the Commission.
Technical dialogue
Prior to the submission of its national medium-term fiscal-structural plan, each Member State shall hold with the Commission a technical dialogue with the objective of ensuring that the national medium-term fiscal-structural plan complies with Articles 13 and 15.
Requirements for national medium-term fiscal-structural plans
A national medium-term fiscal-structural plan shall:
(a)
contain a net expenditure path as well as the underlying macroeconomic assumptions and the planned fiscal-structural measures in order to demonstrate compliance with the fiscal requirements of Article 16(2) and (3);
(b)
include the reference trajectory or the technical information transmitted by the Commission pursuant to Article 5 or Article 9(3), respectively; where the national-medium-term fiscal-structural plan includes a higher net expenditure path than in the reference trajectory issued by the Commission pursuant to Article 5, the Member State concerned shall provide in its plan sound and data-driven economic arguments explaining the difference;
(c)
explain how the Member State concerned will ensure the delivery of reforms and investments responding to the main challenges identified in the context of the European Semester, in particular in the country-specific recommendations, and how that Member State will address the following common priorities of the Union:
(i)
a fair green and digital transition, including the climate objectives set out in Regulation (EU) 2021/1119;
(ii)
social and economic resilience, including the European Pillar of Social Rights;
(iii)
energy security; and
(iv)
where necessary, the build-up of defence capabilities;
(d)
describe the action of the Member State concerned to address the country-specific recommendations addressed to it that are relevant for the macroeconomic imbalances procedure under Regulation (EU) No 1176/2011, and, where applicable, the Commission warnings or the Council recommendations pursuant to Article 121(4) TFEU;
(e)
where applicable, explain how the Member State concerned will ensure the delivery of a relevant set of reforms and investments as referred to in Article 14, underpinning an extension of the Member State’s adjustment period by up to of three years;
(f)
include the impact of reforms and investments already implemented by the Member State concerned, paying particular attention to the impact on fiscal sustainability through future government revenue, expenditure and potential growth, based on sound and data-driven economic evidence;
(g)
contain information on:
(i)
the main macroeconomic and budgetary assumptions,
(ii)
implicit and contingent liabilities,
(iii)
the expected impact of reforms and investments underpinning the extension of the adjustment period,
(iv)
the forecasted level of nationally-financed public investment throughout the period covered by the national medium-term fiscal-structural plan,
(v)
public investment needs including those related to the common priorities of the Union referred to in point (c) of this Article,
(vi)
the consultation of national parliaments and the consultation referred to in Article 11,
(vii)
the consistency and, where appropriate, complementarity with the cohesion policy funds as well as the recovery and resilience plan of the Member State concerned during the period of operation of the Recovery and Resilience Facility pursuant to Regulation (EU) 2021/241.
Criteria for an extension of the adjustment period
1. Where a Member State commits to a relevant set of reforms and investments in accordance with the criteria set out in paragraph 2, the adjustment period may be extended by up to three years.
2. The set of reforms and investment commitments underpinning an extension of the adjustment period shall fulfil, as a general rule, taken altogether, the following criteria:
(a)
it entails, based on credible and prudent assumptions, an improvement of the growth and resilience potential of the economy of the Member State concerned in a sustainable manner;
(b)
it supports fiscal sustainability, with a structural improvement of government finances over the medium term, such as reducing the government expenditure-to-GDP ratio or increasing the government revenue-to-GDP ratio;
(c)
it addresses the common priorities of the Union referred to in Article 13, point (c);
(d)
it addresses the relevant country-specific recommendations addressed to the Member State concerned, including, where applicable, recommendations issued under the macroeconomic imbalances procedure;
(e)
it ensures that the planned overall level of nationally financed public investment over the period covered by the national medium-term fiscal-structural plan is not lower than the medium-term level before that period, taking into account the scope and scale of the country-specific challenges.
3. Each of the reform and investment commitments underpinning an extension of the adjustment period shall be sufficiently detailed, front-loaded, time-bound and verifiable, and shall comply with the following criteria:
(a)
the description of the reform and investment commitments shall be clear and allow the Commission to assess them against the criteria set out in paragraph 2;
(b)
the reforms shall be implemented within the period covered by the national medium-term fiscal-structural plan;
(c)
significant progress in the implementation of the investments shall be achieved by the end of the adjustment period;
(d)
the description of the reforms and investments shall include indicators, where relevant, to allow the assessment of their implementation and monitoring.
4. The set of reform and investment commitments underpinning an extension of the adjustment period shall be consistent with commitments included in the approved recovery and resilience plan of the Member State concerned during the period of operation of the Recovery and Resilience Facility pursuant to Regulation (EU) 2021/241, and the Partnership Agreement agreed under the Multiannual Financial Framework with the Member State concerned.
Revised national medium-term fiscal-structural plan
1. No later than twelve months before the end of the current national medium-term fiscal structural plan, a Member State may request to submit a revised national medium-term fiscal-structural plan to the Commission before the end of the period covered by the national medium-term fiscal-structural plan if there are objective circumstances preventing its implementation within that period. In that case, the revised national medium-term fiscal-structural plan shall cover the period running until the end of the initial period of the plan.
2. In the case of a newly appointed government, a Member State may submit a revised national medium-term fiscal-structural plan covering a new period of four or five years depending on the regular term of its legislature.
3. A Member State may ask the relevant independent fiscal institution to issue an opinion on the macroeconomic forecast and the macroeconomic assumptions underpinning the net expenditure path, providing sufficient time for the independent fiscal institution to prepare its opinion.
As of 1 May 2032, the relevant independent fiscal institutions shall issue those opinions, provided that they have built up sufficient capacity. Failure by an independent fiscal institution to deliver its opinion within a reasonable timeframe shall not prevent a Member State from submitting its revised national medium-term fiscal-structural plan. Where available, the opinion of the independent fiscal institution shall be attached to the revised national medium-term fiscal-structural plan submitted to the Commission.
4. For the purpose of preparing a revised national medium-term fiscal-structural plan by a Member State in accordance with paragraph 1 or 2, the Commission shall transmit to that Member State and to the Economic and Financial Committee a new reference trajectory or, at the request of that Member State, new technical information.
5. Taking into account the past adjustment of the Member State concerned or the lack thereof, the new reference trajectory shall not backload the fiscal adjustment effort and shall, as a rule, not lead to a lower fiscal adjustment effort.
6. If a revised national medium-term fiscal-structural plan is submitted, Articles 12, 13, 14 and 16 to 20 shall apply.
7. Where applicable, the Commission shall assess, in particular, whether any extension of the adjustment period is to apply or continue to apply under the revised national medium-term fiscal-structural plan. The Commission’s assessment shall take into account the implementation of the set of reform and investment commitments underpinning the extension under the original national medium-term fiscal-structural plan and the changes in terms of public debt challenges under the revised national medium-term fiscal-structural plan.
Assessment of national medium-term fiscal-structural plans by the Commission
1. The Commission shall assess each national medium-term fiscal-structural plan within six weeks of its submission. The Member State concerned and the Commission may agree to extend that period, if necessary, as a rule, for up to two weeks.
2. When assessing a national medium-term fiscal-structural plan, the Commission shall examine for each Member State whether the net expenditure path complies with the requirements to put or keep general government debt on a plausibly downward path by the end of the adjustment period or it remains at prudent levels below 60 % of GDP, and it brings and maintains the government deficit below 3 % of GDP over the medium term.
3. When assessing the national medium-term fiscal-structural plan the Commission shall examine for the Member States that have received a reference trajectory whether their net expenditure paths comply with the requirements set out in Articles 6, 7 and 8.
4. The Commission shall examine for all Member States whether their national medium-term fiscal-structural plans comply with the requirements set out in Article 13.
5. The Commission shall examine whether, in respect of the Member State concerned, the set of reforms and investments underpinning an extension of the adjustment period complies with Article 14.
Endorsement of the national medium-term fiscal-structural plan by the Council
1. Upon a recommendation from the Commission, the Council shall adopt a recommendation setting the net expenditure path of the Member State concerned and, where applicable, endorsing the set of reform and investment commitments underpinning an extension of the adjustment period included in the national medium-term fiscal-structural plan. That Council recommendation shall, as a rule, be adopted within six weeks of the adoption of the Commission recommendation.
2. Where the national medium-term fiscal-structural plan serves as the corrective action plan required for the correction of excessive macroeconomic imbalances, as provided for in Article 31, the Council shall also endorse in its recommendation the reforms and investment necessary to correct those imbalances.
Council recommendation for a revised national medium-term fiscal-structural plan
Where it considers that a national medium-term fiscal-structural plan does not comply with the requirements set out in Article 16(2), (3) and (5), taking into account the Commission’s assessment, the Council shall, on a recommendation from the Commission, recommend that the Member State concerned submit a revised national medium-term fiscal-structural plan.
Council recommendation in the case of non-compliance by a Member State
The Council shall, on a recommendation from the Commission, recommend to the Member State concerned that the reference trajectory issued by the Commission be, as a rule, the net expenditure path of the Member State where:
(a)
the Member State concerned fails to submit a revised national medium-term fiscal-structural plan within one month of the Council recommendation referred to in Article 18;
(b)
the Council considers that the revised national medium-term fiscal-structural plan does not comply with the requirements set out in Article 16(2), (3) and (5), with due justification of its position;
(c)
the Member State fails to submit its first national medium-term fiscal-structural plan or a new national medium-term fiscal-structural plan in the last year covered by the ongoing national medium-term fiscal-structural plan, in accordance with Article 11(1).
In the situation referred to in point (a) of the first subparagraph, the Member State concerned and the Commission may agree to extend that deadline by, as a rule, up to one month.
Non-compliance by a Member State with the investment and reform commitments underpinning an extension of its adjustment period
Where a Member State has been granted an extension of its adjustment period but fails to satisfactorily comply with its set of reform and investment commitments underpinning the extension as referred to in Article 14, the Council may on a recommendation from the Commission and in accordance with Article 29, recommend a revised net expenditure path with a shorter adjustment period, unless there are objective circumstances preventing the implementation by the initial deadline.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
