L 66/6 Official Journal of the European Union 6.3.2012 DECISIONS COUNCIL DECISION of 24 January 2012 establishing whether effective action has been taken by Hungary in response to the Council recommendation of 7 July 2009 (2012/139/EU) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 126(8) thereof, Having regard to the recommendation from the European Commission, Whereas: (1) According to Article 126(1) of the Treaty, Member States are to avoid excessive government deficits. The Stability and Growth Pact is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation. The Stability and Growth Pact includes Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure ('), which was adopted in order to further the prompt correction of excessive general government deficits. By Decision 2004/918/EC (%) taken on 5 July 2004 the Council, upon a recommendation from the Commission, decided, in accordance with Article 104(6) of the Treaty establishing the European Community (TEC), that an excessive deficit existed in Hungary (3). On 5 July 2004 the Council, upon a recommendation from the Commission, recommended in accordance with Article 104(7) TEC that the Hungarian authorities take action in a medium-term framework in order to bring the deficit below 3 % of GDP by 2008. By Decision 2005/348[EC (*) taken on 18 January 2005 the Council, in accordance with Article 104(8) TEC, estab- lished that Hungary had not taken effective action in response to the Council recommendation. () OJ L 209, 2.8.1997, p. 6. () OJ L 389, 30.12.2004, p. 27. () All EDP-related documents for Hungary can be found at the following website: http://ec.europa.eufeconomy_finance/economic_ governance/sgp/deficit/index_en.htm (*) OJ L 110, 30.4.2005, p. 42. ©) On 8 March 2005, upon a recommendation from the Commission, the Council adopted a second recommen- dation in accordance with Article 104(7) TEC, confirming the 2008 deadline for the correction of the excessive deficit. After a substantial deterioration of the budgetary  outlook in  Hungary, by Decision 2005/843EC (°) taken on 8 November 2005 the Council, in accordance with Article 104(8) TEC, estab- lished that Hungary had for the second time failed to take effective action in response to the Council recom- mendations. Accordingly, on 10 October 2006, upon a recommen- dation from the Commission, the Council adopted a third recommendation in accordance with Article 104(7) TEC to Hungary, postponing the deadline for the correction of the excessive deficit until 2009. On 7 July 2009, the Council in its recommendation adopted in accordance with Article 104(7) TEC concluded that the Hungarian authorities could be considered to have taken effective action in response to the recommendations from October 2006. With respect to the background of the severe downturn in the context of the economic and financial crisis, in the same recom- mendation the Council issued a revised version of the third recommendation pursuant to Article 104(7) TEC. The Council recommendation of 7 July 2009 called on the Hungarian authorities to put an end to the excessive deficit situation by 2011 at the latest. Inter alia, Hungary was recommended: (i) to limit the deterioration of the fiscal position in 2009 by ensuring a rigorous implemen- tation of the adopted and announced corrective measures to respect the target of 3,9 % of GDP; (i) starting from 2010, to implement rigorously the necessary consoli- dation measures to ensure a continued reduction of the structural deficit and a renewed decline of the headline deficit, with an increased reliance on structural measures, in view of warranting a lasting improvement of public finances; (iii) to spell out and adopt in a timely manner the consolidation measures necessary to achieve the correction of the excessive deficit by 2011; (iv) to ensure a cumulative 0,5% of GDP fiscal effort over 2010 and 2011; and (v) to ensure that the government gross debt ratio was brought onto a firm downward trajectory. (°) OJ L 314, 30.11.2005, p. 18.