§ Mr. SpellarTo ask the Chancellor of the Exchequer what was the central Government deficit in the last financial year as a percentage of gross domestic profit; and what is the maximum level allowed under the Maastricht convergence criterion.
§ Mr. NelsonThere is no maximum level for the budget deficit allowed under the excessive deficits procedure of the Maastricht treaty. Rather, there is a reference level of 3 per cent. of GDP which is one of the factors to be taken into account in deciding whether a country has an excessive deficit.
The measure of the budget deficit used for the excessive deficit procedure is the general Government financial deficit—GGFD. This is provisionally estimated at 7.8 per cent. of GDP in 1993–94. The projections in the 1994–95 medium term financial strategy showed the GGFD being reduced to 3 per cent. of GDP in 1996–97.