Annual progress report
1. Each Member State shall submit to the Commission an annual progress report, by 30 April of each year.
2. The annual progress report shall contain, in particular, information about the progress in the implementation of the net expenditure path as set by the Council, the implementation of broader reforms and investments in the context of the European Semester and, where applicable, in the implementation of the set of reforms and investments underpinning an extension of the adjustment period.
3. Each Member State shall make its annual progress report public.
4. The Commission shall use the information provided by Member States in their annual progress reports, along with other relevant information, for the purpose of delivering the assessment referred to in Article 4(1). The assessment of the Commission shall be made public.
5. Member States may, in accordance with their national legal frameworks, discuss the progress report in their national parliaments and with civil society, social partners and relevant stakeholders.
Monitoring by the Commission
1. The Commission shall monitor the implementation of the national medium-term fiscal-structural plan, and in particular, the net expenditure path as set by the Council and the reforms and investments underpinning the extension of the adjustment period.
2. The Commission shall set up a control account to keep track of cumulative upward and downward deviations of observed net expenditure from the net expenditure path as set by the Council, which shall be reset after the endorsement by the Council of a new national medium-term fiscal-structural plan.
3. The control account shall record a debit when the observed net expenditure in the Member State concerned in a given year is above the net expenditure path as set by the Council.
4. The control account shall record a credit when the observed net expenditure in the Member State concerned in a given year is below the net expenditure path as set by the Council.
5. The cumulated balance of the control account shall be the sum of the yearly debits and credits referred to in paragraphs 3 and 4. It shall be expressed as a percentage of GDP.
6. Debits and credits shall be recorded annually on the basis of outturn data.
7. Where the Council has adopted a recommendation pursuant to Article 25 or 26, the control account of the Member State concerned shall not record deviations.
Role of independent fiscal institutions
1. Member States may request the relevant independent fiscal institution as referred to in Article 8a of Directive 2011/85/EU to provide an assessment of the compliance of the budgetary outturns data reported in the annual progress report with the net expenditure path as set by the Council.
2. Where applicable, Member States may request the relevant independent fiscal institution to analyse the factors underlying a deviation from the net expenditure path as set by the Council. Such analysis shall be non-binding and additional to that of the Commission.
The European Fiscal Board
1. The European Fiscal Board established by Commission Decision (EU) 2015/1937 ( 23 ) shall advise on the exercise of the Commission’s and Council’s functions in the multilateral fiscal surveillance set out in Articles 121, 126 and 136 TFEU.
2. In the performance of its tasks, the European Fiscal Board shall enjoy full independence in the discharge of its functions, performing its duties impartially and solely in the interest of the Union as a whole. It shall not seek nor take instructions from any government of a Member State, Union institutions or bodies or from any other public or private body.
3. For the purposes of paragraph 1, the tasks of the European Fiscal Board shall include:
(a)
providing a timely ex post evaluation of the implementation of the Union fiscal governance framework;
(b)
advising on the prospective fiscal stance appropriate for the euro area as a whole, as well as on the appropriate national fiscal stances that are consistent with it within the rules of the Stability and Growth Pact;
(c)
providing advice, at the request of the Commission or the Council, on the implementation of the Stability and Growth Pact, including on the extension of the general escape clause in accordance with Article 25(3) of this Regulation;
(d)
cooperating closely with independent fiscal institutions as referred to in Article 8a of Directive 2011/85/EU, with a view to promoting exchanges of best practices;
(e)
making suggestions for the future evolution of the fiscal framework.
4. The European Fiscal Board shall be comprised of a Chair and four Members.
5. The Chair and the Members of the European Fiscal Board shall be selected and appointed by the Commission, after consultation of the European Parliament and the Council, following a transparent process and on the basis of proven analytical experience and competences in the analysis of public finances and in macroeconomics. The Chair and the Members of the European Fiscal Board shall be appointed for a period of three years with a possibility of one renewal for an additional period of three years.
6. The European Fiscal Board shall establish its own Rules of Procedure.
7. The European Fiscal Board shall report once a year on its activities to the European Parliament, the Council and the Commission. All reports and advice of the European Fiscal Board shall be made public.
General escape clause
1. On a recommendation from the Commission based on its analysis, the Council may adopt within four weeks, as a rule, a recommendation allowing Member States to deviate from their net expenditure path as set by the Council, in the event of a severe economic downturn in the euro area or the Union as a whole, provided that it does not endanger fiscal sustainability over the medium term. The Council shall specify a one-year time limit for such deviation.
2. As long as the severe economic downturn in the euro area or the Union as a whole persists, the Commission shall continue to monitor debt sustainability and ensure policy coordination and a consistent policy mix that takes into account the euro area and the Union dimension.
3. The Council, on a recommendation from the Commission, may extend the period during which Member States may deviate from their net expenditure paths as set by the Council, provided that the severe economic downturn in the euro area or the Union as a whole persists. The European Fiscal Board shall deliver an opinion on the extension of the general escape clause. An extension may be granted more than once. However, each extension shall be for an additional period of up to one year.
National escape clauses
1. Following a request from a Member State and on a recommendation by the Commission based on its analysis, the Council may within four weeks of the Commission recommendation adopt a recommendation allowing a Member State to deviate from its net expenditure path as set by the Council where exceptional circumstances outside the control of the Member State have a major impact on the public finances of the Member State concerned, provided that such deviation does not endanger fiscal sustainability over the medium term. The Council shall specify a time limit for such deviation.
2. Following a request from the Member State concerned and on a recommendation by the Commission, the Council may extend the period during which that Member State may deviate from the net expenditure path as set by the Council, provided that the exceptional circumstances persist. An extension may be granted more than once. However, each extension shall be for an additional period of up to one year.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
