Excessive deficit procedure

What is the excessive deficit procedure?

The excessive deficit procedure (EDP) is a mechanism designed to ensure that EU member states return to or maintain discipline in their governments’ budgets.

Economic and budgetary policies are very important to member states. They view them as a matter of common concern. To limit government deficit and debt, member states have agreed reference values, which they have enshrined in the EU treaties: a 3% deficit ratio and a 60% debt ratio. The ratios are always calculated relative to a member state’s GDP.

The reference value are:

All member states must avoid exceeding these reference values. They have to avoid running excessive government deficits and they need to reduce excessive debt.

The aim of the excessive deficit procedure is to deter excessive government deficits and, if they occur, to prompt their correction. The rules of the EDP are set out in the ‘corrective arm’ of the Stability and Growth Pact (SGP) which was recently revised.

• Economic governance framework
• Article 126 Treaty on the Functioning of the European Union

Steps of the excessive deficit procedure

The EU’s new economic governance framework, in force since 30 April 2024, has changed the way the EDP is carried out. 

The process involves several key steps. 

If a member state exceeds the reference values for deficit or debt, or is at risk of exceeding them in the near future, the Commission prepares a report in which it analyses whether the member state concerned is running an excessive deficit.

If, all relevant factors taken into consideration, the Commission believes that an excessive deficit procedure is warranted for a member state, it informs the Council accordingly and proposes that the Council adopt a decision establishing that there is an excessive deficit in the member state concerned.

Following the Commission’s proposal, the Council considers any observations  made by the member state concerned and then adopts a decision containing an overall assessment as to whether there is an excessive deficit.

If the Council has concluded that there is an excessive deficit, it then adopts a recommendation, based on a Commission recommendation, setting out how the situation should be rectified.  The recommendation may contain a corrective budgetary path, expressed in numerical terms, and a deadline. 

It is then up to the member state  concerned to take the necessary action within six months.

If, by the deadline, no effective action has been taken, or the member state does not comply with the recommendation, the Council may impose sanctions, including, for euro area member states, a fine of up to 0.05% of the previous year’s GDP. 

The fine needs to be paid every six months until the Council assesses that the member state concerned has taken effective action. If the member state continues to fail to comply, the Council has the right to intensify the sanctions.

Voting rules 

Council decisions and recommendations are adopted under specific voting rules.

The member state concerned does not have a vote. 

A qualified majority is reached when at least 55% of the members of the Council representing the participating member states, representing at least 65% of the population of those states, vote in favour. 
 
Any blocking minority must include at least the minimum number of Council members, representing more than 35% of the population of the participating member states, plus one member.

• Voting system

Ongoing excessive deficit procedures

Deficit-based excessive deficit procedure

Austria

On 8 July 2025, the Council decided to open an EDP against Austria. The decision was warranted given Austria's 4.7% budget deficit in 2024. In parallel to its decision, the Council also approved a recommendation to Austria outlining the net expenditure path and timeline that should be followed to put an end to its excessive deficit by 2028.

The recommendation set limits for Austria’s nominal growth rate of net expenditure as follows: 2.6% in 2025, 2.2% in 2026, 2.2% in 2027 and 2.0% in 2028.

Belgium

On 26 July 2024, following a proposal by the Commission, the Council launched an EDP against Belgium, given the country’s 4.4% budget deficit in 2023.

On 21 January 2025, the Council adopted a recommendation that Belgium put an end to its excessive deficit by 2027. The recommendation set limits for Belgium’s nominal growth rate of net expenditure as follows: 2.4% in 2025, 1.9% in 2026 and 2.0% in 2027.

On 20 June 2025, the Council adopted a revised recommendation for Belgium to end its excessive deficit by 2029. The recommendation modified the limits for Belgium’s nominal growth rate of net expenditure to 3.6% in 2025, 2.5% in 2026, 2.5% in 2027, 2.1% in 2028 and 2.1% in 2029.

Bulgaria

On 10 July 2026, the Council opened an EDP against Bulgaria. The decision was warranted, given Bulgaria’s projected 2026 government deficit of 4.1% of GDP, with the country’s deficit expected to continue exceeding 3% of GDP in 2027.

In its recommendation, the Council stipulates that Bulgaria should therefore take effective action and present by 15 October 2026 the necessary measures to reduce its deficit. Bulgaria should also ensure that its nominal cumulative net expenditure growth rate does not exceed 4.2% in 2026, 7.7% in 2027, 11.4% in 2028 and 15% in 2029.

Finland

On 20 January 2026, the Council opened an EDP against Finland. The decision was warranted given Finland’s 4.4% budget deficit in 2024 and planned budget deficit of 4.3% in 2025.

In its recommendation, the Council stipulates that Finland should take effective action and present the necessary measures to reduce its deficit by 30 April 2026.

The recommendation set limits for Finland’s nominal cumulative net expenditure growth rate as follows: 2.5% in 2026, 4.1% in 2027 and 5.9% in 2028.

France

On 26 July 2024, following the Commission's proposal, the Council launched an EDP against France, given the country’s 5.5% budget deficit in 2023.

On 21 January 2025, the Council adopted a recommendation establishing that France should put an end to its excessive deficit by 2029. The recommendation set limits for France’s nominal growth rate of net expenditure as follows: 0.8% in 2025, 1.2% in 2026, 1.2% in 2027, 1.2% in 2028 and 1.1% in 2029.

Italy

On 26 July 2024, following the Commission's proposal, the Council launched an EDP against Italy, given the country’s 7.4% budget deficit in 2023.

On 21 January 2025, the Council adopted a recommendation stipulating that Italy should put an end to its excessive deficit by 2026.

The recommendation set limits for Italy’s nominal growth rate of net expenditure as follows: 1.3% in 2025 and 1.6% in 2026.

Hungary

The Council launched an EDP against Hungary on 26 July 2024, given Hungary's 6.7% budget deficit in 2023.

On 18 February, the Council recommended that Hungary put an end to its excessive deficit by 2026. The recommendation set limits for Hungary’s nominal growth rate of net expenditure as follows: 4.3% in 2025 and 4.0% in 2026.

Poland

On 26 July 2024, following the Commission's proposal, the Council launched an EDP against Poland, given its 5.1% budget deficit in 2023.

On 21 January 2025, the Council recommended that Poland put an end to its excessive deficit by 2028. The recommendation set limits for Poland’s nominal growth rate of net expenditure as follows: 6.3% in 2025, 4.4% in 2026, 4.0% in 2027 and 3.5% in 2028.

Slovakia

On 26 July 2024, following the Commission's proposal, the Council launched an EDP against Slovakia, given the country’s 4.9% budget deficit in 2023.

The recommendation set limits for Slovakia’s nominal growth rate of net expenditure as follows: 3.8% in 2025, 0.9% in 2026 and 1.6% in 2027.

The recommendation set limits for Slovakia’s nominal growth rate of net expenditure as follows: 3.8% in 2025, 0.9% in 2026 and 1.6% in 2027.

Romania

The Council launched an EDP against Romania on 3 April 2020 with a view to bringing its excessive deficit to an end.

On 26 July 2024, the Council established that the excessive deficit procedure for Romania should remain open, as the country had not taken effective action to correct its deficit.

Since Romania continued to run high government deficits which exceeded the 3% reference value as laid down in the Treaties, on 20 June 2025 the Council adopted a new decision establishing that Romania had not taken effective action in response to the Council's recommendations.

On 8 July 2025, the Council revised its recommendation to Romania under its ongoing EDP. Romania therefore had to take effective action and present the measures necessary to reduce its deficit by 15 October 2025 and put an end to its EDP by 2030.

The recommendation set limits for Romania’s nominal growth rate of net expenditure as follows: 2.8% in 2025, 2.6% in 2026, 4.6% in 2027, 4.4% in 2028, 4.2% in 2029 and 4.0% in 2030.

Debt-based excessive deficit procedure

Under the new rules, all member states need to prepare national medium-term fiscal-structural plans. These must contain a net expenditure path. 

As long as highly indebted countries follow their net expenditure path as set by the Council, bringing their debt onto a plausibly downward path and approaching the treaty reference value at a satisfactory pace, they will not be subject to an excessive deficit procedure. Compliance will be assessed regularly.

Budgetary trends

All EU member states are required to respect budgetary discipline, based on criteria and reference values set out in the EU Treaties. Specifically, their government deficit should not exceed 3% of gross domestic product (GDP), and their public debt should remain below 60% of GDP.

The charts below illustrate how member states are performing in relation to those two thresholds.

Evolution of deficit by member state (2013-2024)

The chart below shows how each EU member state's government deficit has evolved over time in relation to the 3% reference value.

Evolution of debt by member state (2013-2024)

The chart below tracks the development of public debt levels in each EU member state compared to the 60% reference value.