These countries are getting into the EU’s “observation category” – Finland is not included – 2024-04-29 16:48:08

11 member countries are at risk of being put under EU surveillance. The illustration shows the headquarters of the European Commission in Brussels. OLIVIER HOSLET

In 2023, the deficit of the public finances of the eleven member states of the European Union had exceeded the 3 percent of gross domestic product defined in the EU Treaty.

For example, France and Italy, the EU’s second and third largest economies, did not come close to the target, and they will almost certainly fall under the European Commission’s “observation category”, reports the financial magazine Financial Times (FT).

The EU’s monitoring category refers to being subject to an excessive deficit procedure, as a result of which the Commission can even fine a member country. The first measure, however, is recommendations on measures to remedy the situation.

Some countries above the 3 percent mark, such as Spain and the Czech Republic, say their deficits will return to 3 percent or below this year and should not be penalized for temporarily breaking the rule.

Among the countries that crossed the border, Poland, Romania and Slovakia demanded an exception to the rule during Russia’s war of aggression against Ukraine. According to the countries, the increase in the defense budget has pushed them over the threshold.

Vice-president responsible for financial affairs of the Commission Valdis Dombrovskis told the FT that defense spending will be taken into account for the deficit procedure.

Based on the 2023 statistics, Finland fell just short of the EU monitoring category limit. The deficit of the public finances was 2.7 percent in relation to GDP, or a good 7 billion euros in 2023.

However, the Ministry of Finance estimated last week that without the government’s additional adjustment measures to the public economy, Finland would exceed the 3 percent limit for several years.