On Tuesday 9 July, the European Commission announced that it had forwarded to the Council of the European Union legislative proposals to formally initiate excessive deficit procedures (EDP) against seven Member States: Belgium, France, Italy, Hungary, Malta, Poland and Slovakia (see EUROPE 13435/1).
On Tuesday 16 July, the Ecofin Council should be asked to approve these proposed decisions. A qualified majority of Member States would be needed to prevent these decisions from being adopted.
The proposals are limited to establishing the existence of an excessive deficit in these countries in 2023: 4.4% of GDP in Belgium, 5.5% of GDP in France, 7.4% of GDP in Italy, 6.7% of GDP in Hungary, 4.9% of GDP in Malta, 5.1% of GDP in Poland and 4.9% of GDP in Slovakia. And these deficits are expected to remain well above the 3% of GDP threshold in 2024.
According to the European Commission, the gradual introduction of the reformed Stability and Growth Pact in 2024 explains why it has not presented a public finance consolidation path for these countries, a precedent that the ‘European Fiscal Board’ does not view favourably (see EUROPE 13445/12).
The Member States will negotiate this budgetary path with the Commission as part of preparing their multiannual macro-budgetary programme, which will also detail the investments and reforms they intend to carry out over a period of 4 to 7 years.
The EDP for Romania, which was already open before the Covid-19 pandemic, has also been reactivated.
See proposed decisions: https://aeur.eu/f/cz8 (Original version in French by Mathieu Bion)