EU member states on Friday approved findings that seven of the 27 member states have excessive budget deficits, launching a formal procedure to reduce borrowing.
Member states have given the green light to a recommendation from the European Commission to initiate procedures against excessive government deficits – and therefore too much new debt – in Belgium, France, Italy, Hungary, Malta, Poland and Slovakia.
The purpose of excessive deficit procedures is to give member states control over their budgets. In theory, the procedures could lead to costly fines, but in practice this has never happened.
The Member States also agreed to keep open an existing procedure against Romania.
The opening of the procedures means that EU member states will be asked to adopt Commission recommendations on how to address the shortages within a set timeframe by the end of the year, an EU press release said.
The ministers representing their countries in the Council of the European Union took decisions separately for each of the seven Member States.
The decisions were taken by written procedure in the national capitals, not by a physical council meeting. The seven countries involved were not allowed to participate in decision-making on their own affairs.
The international treaties that form the basis of the European Union now require member states to run budget deficits above 3% of their gross domestic product (GDP). Government debt – which arises when governments run budget deficits – cannot exceed 60% of GDP.
Of the seven countries involved, Italy had the largest budget deficit in 2023, at 7.4% of GDP, according to the EU statement. Hungary had a budget deficit of 6.7%, Romania 6.6%, France 5.5%, Poland 5.1%, Malta and Slovakia 4.9% and Belgium 4.4%.
