EU member states on Friday endorsed findings that seven of the 27 member states have excessive budget deficits, kick-starting a formal procedure intended to reduce borrowing.
The member states green-lit a European Commission recommendation to begin procedures concerning government deficits that are too large – and thus take on too much new debt – in Belgium, France, Italy, Hungary, Malta, Poland and Slovakia.
The purpose of excessive deficit procedures is to get member states to get a grip on their budgets. In theory, the procedures can lead to costly penalties, but this has never actually happened.
The member states also agreed to keep open an existing procedure against Romania.
The opening of the procedures means that towards the end of the year, EU member states will be asked to approve recommendations from the commission on how to address the deficits in a given time frame, an EU press release said.
Ministers representing their countries in the Council of the European Union took separate decisions for each of the seven member states individually.
The decisions were made via a written procedure among the national capitals – not an in-person council meeting – and the seven countries concerned were not allowed to participate in the decisions on their own cases.
The international treaties underpinning the European Union state that member countries should now allow their budget deficits to exceed 3% of their gross domestic product (GDP). Sovereign debt – which accumulates when governments run budget deficits – should not exceed 60% of GDP.
Of the seven countries concerned, Italy had the largest budget deficit in 2023, with 7.4% of GDP, according to the EU’s 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%.
