The Council adopts recommendations for countries with excessive deficit

The Council adopted recommendations for seven countries to correct their excessive deficit situation within a set time period: Belgium, France, Italy, Malta, Poland, Slovakia and Romania.

The recommendations contain a corrective budgetary path, expressed in numerical terms, and a deadline, for each member state. These are in line with each member states’ objectives, expressed in their medium-term fiscal-structural plans, submitted in the context of the implementation of the EU’s new economic governance framework.

Belgium

The Council recommends that Belgium should put an end to the excessive deficit situation by 2027. Belgium should ensure that the nominal growth rate of net expenditure does not exceed 2.4% in 2025, 1.9% in 2026 and 2.0% in 2027. As Belgium has not yet submitted a medium-term fiscal-structural plan, the corrective path is based on the reference trajectory which the Commission transmitted to Belgium in June 2024, as updated based on more recent data.

France

The Council recommendation establishes that France should put an end to the excessive deficit situation by 2029. France should ensure that the nominal growth rate of net expenditure does not exceed 0.8% in 2025, 1.2% in 2026, 1.2% in 2027, 1.2% in 2028 and 1.1% in 2029.

Italy

The Council recommends that Italy should put an end to the excessive deficit situation by 2026. Italy should ensure that the nominal growth rate of net expenditure does not exceed 1.3% in 2025 and 1.6% in 2026.

Malta

The Council recommends that Malta should put an end to the excessive deficit situation by 2027. Malta should ensure that the nominal growth rate of net expenditure does not exceed 6.0% in 2025, 5.8% in 2026 and 5.8% in 2027.

Poland

The Council recommends that Poland should put an end to the excessive deficit situation by 2028. Poland should ensure that the nominal growth rate of net expenditure does not exceed 6.3% in 2025, 4.4% in 2026, 4.0% in 2027 and 3.5% in 2028.

Romania

The Council recommends that Romania should put an end to the excessive deficit situation by 2030. Romania should ensure that the nominal growth rate of net expenditure does not exceed 5.1% in 2025, 4.9% in 2026, 4.7% in 2027, 4.3% in 2028, 4.2% in 2029 and 3.9% in 2030.

Slovakia

The Council recommendation establishes that Slovakia should put an end to the excessive deficit situation by 2027. Slovakia should ensure that the nominal growth rate of net expenditure does not exceed 3.8% in 2025, 0.9% in 2026 and 1.6% in 2027.

Background

Member states must comply with budgetary discipline on the basis of criteria and reference values set in the EU Treaties: their deficit should not exceed 3% of their gross domestic product (GDP) and their debt should not exceed 60% of their GDP. All member states have to respect these Treaty reference values.

If an excessive deficit occurs in a member state, the aim of the excessive deficit procedure is to prompt its correction by putting member states under enhanced scrutiny and providing recommendations for them to take effective action to correct the deficit. Ultimately, the goal is to strengthen member states’ debt sustainability.

Under the new economic governance framework, once an excessive deficit procedure has been launched, the Council shall make a recommendation to the member state concerned to take effective action to bring the situation of excessive deficit to an end within a  set deadline.

In its recommendation, the Council shall also request that the member state implements a corrective net expenditure path which ensures that the general government deficit is brought and maintained below the 3% of GDP reference value within the deadline set in the recommendation.

On 26 July 2024, the Council, formally launched excessive deficit procedures against seven member states, and decided to keep the excessive deficit procedure against Romania open, based on Commission proposals for Council decisions establishing the existence of excessive deficits for seven member states (Belgium, France, Italy, Malta, Poland, Slovakia and Hungary) and a decision stating that Romania, which is under the excessive deficit procedure since 2020, has not taken effective action to correct the situation.

This year, exceptionally, the timing of recommendations to member states under the excessive deficit procedure to take effective action has been aligned with the provisions of the EU’s reformed economic governance framework.

Under the new rules, in force since 30 April 2024, member states are required to prepare medium-term fiscal structural plans, setting out their expenditure paths and their priority reforms and investments for the next 4-7 years.

The objective was to align the Council recommendations under the excessive deficit procedures with those under the medium-term fiscal-structural plans.

More information Council of the European Union.