Fiscal Responsibility Act 2012

3.

Budgetary rule.

3.— (1) The budgetary rule is that for each year either—

( a) the budget condition (set out in subsection (2) ), or

( b) the adjustment path condition (set out in subsection (4) ),

is satisfied.

(2) The budget condition is that either—

( a) the budgetary position of the general government is in balance or in surplus, or

( b) the requirement in paragraph (a) is not met only as a result of exceptional circumstances and the failure to meet it does not endanger fiscal sustainability in the medium-term.

(3) The requirement in subsection (2)(a) shall be deemed to be respected if the annual structural balance of the general government is at the medium-term budgetary objective.

(4) The adjustment path condition is that either—

( a) the annual structural balance of the general government is converging towards the medium-term budgetary objective in line with the timeframe set in accordance with the 1997 surveillance and coordination Regulation, or

( b) the requirement in paragraph (a) is not met only as a result of exceptional circumstances and the failure to meet it does not endanger fiscal sustainability in the medium-term.