2024-07-26 18:56:09
Italy, Belgium, Hungary, Poland, Slovakia, Malta and France were all penalised. These seven member states were the targets of the Brussels procedure because of their high public deficits.
In addition, Romania, which has been subject to such procedures since 2019, continues to suffer “due to the lack of effective measures to correct the deficit,” the European Commission noted in a press release from the body representing the twenty-seven countries.
Corrective action expected
Last year, these countries exceeded the public deficit limit of 3% of gross domestic product (GDP) set by the Stability Pact, which also limits debt to 60% of GDP. They must take corrective measures to comply with these budget rules in the future or face economic sanctions.
The rules were put on hold after 2020 due to the economic crisis linked to Covid-19 and the subsequent war in Ukraine. This year, they were reformed and relaunched. Last year, the highest EU deficits were in Italy (7.4% of GDP), Hungary (6.7%), Romania (6.6%), France (5.5%) and Poland (5.1%).
Sanctions have never been imposed
The Stability Pact in principle provides for financial sanctions of 0.1% of GDP per year on countries that do not impose coercive measures, which for France is close to 2.5 billion euros. In reality, these politically explosive penalties have never been implemented.
France, with debt at 110 percent of GDP, ran excessive deficits for much of the decade since the euro was created in the early 2000s, but emerged from the deficit trap in 2017.
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