Excessive Deficit procedure
Excessive Deficit procedure
States which have joined the Euro may only run a public budget deficit of up to 3% of Gross National Product (GNP) according to the Stability and Growth Pact.
The EU Commission starts an excessive deficit procedure when there is a risk that a country will exceed the 3% limit. The procedure can lead to a fine if upheld in the Council of Ministers, but this has never happened so far.
Notes
- In 2002, the EU Commission started proceedings against Ireland and Portugal.
- Since 2003, Germany has had a deficit exceeding the 3% limit but was expected to get back on track in 2007.
- In 2005, France had a 2.9 % deficit. It was the first time since 2002 that they were below the limit.
- Since the Financial crises in 2008 most Eurozone members have found themselves in breach of the deficit limits because of the financial crisis.
Links
See also Convergence criteria and European Monetary System.
http://europa.eu/scadplus/leg/en/lvb/l25020.htm
