Excessive Deficit procedure
States which have joined the Euro (Euroland countries) 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.
Notes
- In 2002, the EU Commission started proceedings against Ireland and Portugal.
- Both Germany and France infringed the rule in January 2003, and were criticised. The procedure can lead to a fine if upheld in the Council of Ministers.
Links
See also Convergence criteria and European Monetary System.