EU states face legal action over excessive indebtedness – DW – 19.06.2024

On Wednesday, the European Union is expected to take nearly ten member states to task for excessive spending.

The European Commission will publish its assessments of the budgets and economies of the 27 EU countries on Wednesday. France, Italy and Belgium are among the member states against which legal action could be taken due to their excessive new debt.

The EU has suspended debt and deficit rules to help countries cope with the economic consequences of the Covid-19 pandemic and Russia’s invasion of Ukraine.

The rules are now back in force and any EU country that exceeds the debt and deficit limits runs the risk of legal action.

The EU’s golden debt rules

According to the reformed rules, the debt burden of an EU member state may not exceed 60 percent of its gross domestic product (GDP).

Highly indebted EU countries with a debt level of over 90% of GDP must reduce their debt ratio by one percentage point annually.

In addition, the general government deficit, i.e. the difference between government revenue and expenditure, must be kept below three percent.

According to the Commission’s economic forecast, France is at -5.5%, Italy at -4.4% and Belgium at -4.4% and will exceed this deficit limit in 2024.

According to the rules, Austria, Finland, Estonia, Hungary, Malta, Poland, Romania and Slovakia also have deficits that are too high. Spain is at exactly -3.0%.

kb/rc (AFP,dpa)