EU Criticizes Seven Countries for High Deficits

Brussels (dpa) – In a significant move, EU member states have endorsed findings indicating that seven of the 27 nations are grappling with excessive budget deficits. This decision initiates a formal procedure aimed at curbing borrowing in Belgium, France, Italy, Hungary, Malta, Poland, and Slovakia. The European Commission's recommendation to address these large deficits, which exceed the EU's stipulated limits, was approved, signaling a concerted effort to enforce fiscal discipline among member states. The excessive deficit procedures are designed to encourage countries to manage their budgets more effectively. While these procedures can theoretically lead to financial penalties for non-compliance, such measures have never been implemented in practice. Additionally, the member states agreed to maintain an ongoing procedure against Romania, highlighting the EU's commitment to fiscal oversight. As part of this process, EU member states will be asked to review and approve recommendations from the European Commission later this year, outlining strategies to rectify the identified deficits within a specified timeframe. Notably, the decisions regarding the seven countries were made through a written procedure, excluding the nations involved from participating in discussions about their own fiscal situations. According to EU regulations, member states are required to keep their budget deficits below 3% of their gross domestic product (GDP) and ensure that sovereign debt does not exceed 60% of GDP. Among the countries facing scrutiny, Italy reported the highest deficit at 7.4% of GDP for 2023, followed by Hungary at 6.7% and Romania at 6.6%.