In the report attached to the communication on public finance, the Executive acknowledges that "the number of countries showing excessive deficits is decreasing". Anyway, it is also stated that "with unchanged policies, just 10 out of the 27 EU countries will achieve their respective medium-term balance sheet objectives in 2008, in spite of the three years in a row of economic growth". For those reasons, the experts of the Commission insist on the functioning of the "preventive branch" of the Stability Pact, which tends to avoid excessive deficits through "sound planning and implementation of medium-term balance sheets". Therefore, the contents of the EU Treaty are confirmed. The Treaty actually imposes "the control and coordination of budgetary policies"; it fixes a threshold equalling 3% of GDP for public deficits; and asks for the national debt to be lower than 60% of GDP. The Commission insists on the fact that "the fundamental thing is that national governments take advantage of the favourable economic situation to quickly reach healthy and sustainable public finance", otherwise the EU economy runs the risk of losing competitiveness, on the whole, generating financial instability and maybe unemployment.
