The EMU (Economic and Monetary Union) is a European collaboration concerning monitoring the economic balance of the member countries.
The European Commission, the Council of the European Union and the European Parliament have adopted a number of regulations, which form the legal basis of the EDP-notifications.
The regulations clearly define how the EMU- debt and EMU- deficit are defined on the basis of the European System of Accounts (ESA10).
The regulations clearly states when the EU Member States have to report data to the European Commission.
A Eurostat decision concerns the treatment of a specific area within Public Finances. The EU Member States are obligated to adopt these decisions in their figures.
The objective of the Stability and growth pact is to prevent the occurrence of an excessive budgetary deficit in the euro area, following the start of the third stage of the economic and monetary union (EMU). As the Treaty only made provisions for quantitative criteria for the adoption of the single currency and not for any definition of a budgetary policy to be conducted after the changeover to the euro, the adoption of such a pact was considered necessary by the Member States. The stability and growth pact is therefore in line with the principles set out in the Treaty and extends its provisions.
The pact is intended to ensure sound management of public finances in the euro area in order to prevent a situation from arising in which one Member State's lax budgetary policy penalises the other Member States via interest rates, and undermines confidence in the economic stability of the euro area. It seeks to achieve sustained and lasting convergence of the economies for the Euro Member States.
Council regulation on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies introduce i.e. the medium term objective of budgetary position close to balance or in surplus and lay down the procedure for the member states yearly stability and convergence programmes. The regulation also introduces an early warning mechanism to avoid the appearence of an excessive deficit.
Council regulation on speeding up and clarifying the implementation of the excessive deficit procedure lay down i.e. the procedure, which are used, if a member state has an excessive deficit and receive a recommendation, and if necessary allow for the imposition of sanctions for Euro member states.
Since the implementation of the third stage of the EMU, the multilateral surveillance procedure has given rise to a constant dialogue on economic and budgetary policy between Member States. A central element of this dialogue is the broad economic policy guidelines (BEPGs), which take the form of Council recommendations issued to the Member States and prepared each year by the Council on the basis of a proposal from the Commission. Member States are required to frame their economic policies in accordance with these recommendations. Each year the Commission draws up a report on the implementation of the recommendations.
The convergence programme is prepared in accordance with the Council Regulation (EU) No. 1466/97 on the Stability and Growth Pact. According to this regulation, Euro Member States prepare stability programmes, whereas the non-Euro Member States are required to prepare convergence programmes. The updated Danish convergence programme is made by the ministry of Finance and presented before the Danish Parliament and the European Commission.
All EU Member States report annually updated programmes for stability, respectively, convergence. The programmes will be evaluated according to sound public finances, which is a part of the surveillance and co-ordination of the economic policies.
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