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.