On Wednesday, the European Commission might threaten legal action against France, Italy, and Belgium, among other EU member states, for accumulating large new debts.
According to an economic prediction issued in May, the EU executive arm anticipated that numerous EU nations will violate budget deficit and national debt limits.
In addition to a judgment on excessive new debt levels, the commission was anticipated to provide a proposal for the European Union’s budget for 2025.
The EU opted to suspend debt and deficit laws in the economic aftermath of the COVID-19 outbreak and Russia’s full-fledged invasion of Ukraine.
With the regulations back in force after certain modifications were made, any EU nation that violated the debt and deficit limitations faced legal consequences if the commission decided to act.
This is essentially to guarantee the eurozone’s stability, with the goal of bringing nations into a sound financial position through the excessive deficit procedure.
This began a procedure in which an EU nation must implement actions to lower its debt and deficit over a four-year period while being monitored by the commission.
Under specific conditions, such as a country’s commitment to growth-promoting reforms and investments, the plan might be extended for seven years.
The commission might also temporarily consider the rise in interest payments when determining adjustment efforts.
According to the new regulations, EU member states may not acquire debt exceeding 60% of their GDP.
EU nations with debt levels above 90% of GDP must lower their debt ratio by 1% yearly. nations with debt levels between 60% and 90% must additionally reduce their debt ratio by 0.5 percentage points.
Furthermore, the general government deficit, or the difference between revenue and spending in the public budget, which was mostly covered by loans, must be kept at less than 3% of GDP.
According to the commission’s economic estimate, France (5.5%), Italy (4.4%), and Belgium (4.4%) will exceed the deficit ceiling in 2024.
Austria, Finland, Estonia, Hungary, Malta, Poland, Romania, and Slovakia all have excessive deficits, according to the regulations.
Spain is at precisely -3.0 percent.
