Shafaq News/ The European Union announced measures addressing excessive public budget deficits in seven member states, requiring significant corrective actions or risking financial sanctions.
The European Council initiated excessive public deficit measures for France, Belgium, Hungary, Poland, Slovakia, Malta, and Romania.
According to the EU’s official press release, these countries exceeded the 3% GDP public deficit limit in 2023, under the European Stability and Growth Pact (SGP).
The Pact requires countries to maintain a debt limit of 60% of GDP and implement corrective measures if needed to avoid financial sanctions.
Romania, under this measure since 2019, has been specifically targeted for failing to correct its deficit. The Stability Pact rules, suspended after 2020 due to the Covid-19 crisis and the war in Ukraine, were reformed and reactivated this year.
Therefore, deficit countries must submit medium-term plans to the European Commission by next September detailing how they will meet budget requirements.
In 2023, the highest deficits in the EU were Italy at 7.4% of GDP, Hungary at 6.7%, Romania at 6.6%, France at 5.5%, and Poland at 5.1%.
The SGP mandates annual financial sanctions of 0.1 percent of GDP for countries failing to comply with required corrections, equating to roughly 2.5 billion euros (2.75 billion USD) for France. However, these politically sensitive sanctions have not been enforced yet.
France, with debt at 110% of GDP, has frequently faced excessive deficit measures since the euro’s introduction.
