Formally, the European executive will propose to member states to open the disciplinary procedures provided for by European budgetary rules during a next meeting of finance ministers, probably on July 16.
These rules were put on hold after 2020 because of the economic crisis linked to Covid and then the war in Ukraine. They were reformed and reactivated this year.
The Stability Pact in principle provides for financial sanctions of 0.1% of GDP per year for countries that do not implement the imposed corrections, or nearly 2.5 billion euros in the case of France. .
European rules require countries with excessive deficits to reduce the deficit by a minimum of 0.5 points per year, which requires a massive effort of austerity.
By the beginning of October, the Twenty-Seven will have to send their multi-annual budgetary plans to Brussels which will be scrutinized by the Commission and the Council, the body of the Member States. In November, Brussels will give its recommendations for the restoration of public accounts.
The highest EU deficits were recorded last year in Italy (7.4% of GDP), Hungary (6.7%), Romania (6.6%), France (5. 5%) and in Poland (5.1%). In addition to these five countries, excessive deficit procedures should also concern Slovakia, Malta (4.9%) and Belgium (4.4%).
Three other countries could be identified but with less certainty. Spain and the Czech Republic exceeded 3% in 2023 but plan to get back on track this year. Estonia has also crossed this threshold but its public debt, at around 20% of GDP, remains well below the 60% limit set by the EU, unlike the other countries cited.
The Stability Pact was adopted in 1997 with a view to the arrival of the single currency on January 1, 1999. Responding to Germany’s concern to prevent member countries from pursuing lax budgetary policies, it sets the objective of accounts in balance.
