10.7.2008 Official Journal of the European Union L 181/43 COUNCIL DECISION of 3 June 2008 abrogating Decision 2005/182/EC on the existence of an excessive deficit in Slovakia (2008/562[EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 104(12) thereof, Having regard to the recommendation from the Commission, Whereas: By Council Decision 2005/182/EC (1), following a recom- mendation from the Commission in accordance with Article 104(6) of the Treaty, it was decided that an excessive deficit existed in Slovakia. The Council noted that the general government deficit was 3,6 % of GDP in 2003, above the 3 % of GDP Treaty reference value. On 5 July 2004, in accordance with Article 104(7) of the Treaty and Article 3(4) of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (3), the Council made, based on a recommendation from the Commission, a recommendation addressed to Slovakia with a view to bringing the excessive deficit situation to an end by 2007 at the latest. The recommendation was made public. In accordance with Article 104(12) of the Treaty, a Council Decision on the existence of an excessive deficit is to be abrogated when the excessive deficit in the Member State concerned has, in the view of the Council, been corrected. In accordance with the Protocol on the excessive deficit procedure annexed to the Treaty, the Commission provides the data for the implementation of the procedure. As part of the application of the Protocol, Member States are to notify data on government deficits and debt and other associated variables twice a year, namely before 1 April and before 1 October, in () O] L 62, 9.3.2005, p. 16. (® OJ L 209, 2.8.1997, p. 6. Regulation as amended by Regulation (EC) No 1056/2005 (O] L 174, 7.7.2005, p. 5). accordance with Article 4 of Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (3). Based on data provided by the Commission (Eurostat) in accordance with Article 8g(1) of Regulation (EC) No 3605/93 following the notification by Slovakia before 1 April 2008 and on the Commission services' spring 2008 forecast, the following conclusions are warranted: — due to data revisions after the 2004 Council Decision on the existence of an excessive deficit, the general government deficit remained below 3 % of GDP in the years 2003-2005. After increasing to 3,6 % of GDP in 2006 it was reduced to 2,2 % of GDP in 2007, which is below the 3% of GDP deficit reference value. This compares with a target of 2,9 % of GDP set in the December 2006 update of the convergence programme, — the fiscal consolidation has benefited from buoyant GDP, employment and revenue growth, allowing the expenditure-to-GDP ratio to fall faster than the revenue-to-GDP  ratio. The falling expenditure-to- GDP ratio was also induced by expenditure restraint and expenditure reforms such as substantial restrictions on social benefits. Nevertheless, the cyclical upswing and growth dividends from structural reforms were not fully exploited for fiscal consolidation. As a result, the structural deficit (i.e. the cyclically adjusted balance net of one-off and other temporary measures) is estimated to have dete- riorated from some 1% % of GDP in 2003 to around 3% of GDP in 2006 before improving to around 2V2% of GDP by 2007. However, part of the structural deterioration can be attributed to the intro- duction of the second funded pension pillar in 2005 with transfers to this pillar estimated to have increased from 0,8 % of GDP in 2005 to 1,2 % and 1,3% of GDP in 2006 and 2007 respectively. In addition, increases in taxes on cigarettes preceded by sizeable pre-stocking with cigarettes at various stages of the distribution chain led to sizeable shifts in tax revenue resulting in extra tax revenue in 2003, 2005 and 2007 followed by equivalent revenue shortfalls in the subsequent years, () OJ L 332, 31.12.1993, p. 7. Regulation as last amended by Regu- lation (EC) No 2103/2005 (O] L 337, 22.12.2005, p. 1).