The European Commission has evaluated whether member states comply with the EU Treaty criteria for public finance deficits this spring. While Finland meets the deficit criterion, many other countries do not. The Commission has proposed bringing several countries, including Belgium, France, Italy, Hungary, Malta, Poland, and Slovakia, into the excessive deficit procedure. However, Finland has been assured that it will not fall into this category.
According to the EU Treaty, public finance deficits should not exceed three percent of GDP, with some allowance for minor and temporary deviations. Finance Minister Riikka Purra attributes Finland’s success in keeping its deficit below this threshold to the government’s additional savings measures taken in April. The EU Commission will conduct an evaluation next spring based on implementation data.
The decision on initiating possible procedures lies with the Council of member countries and not the Commission. The EU’s Economic and Financial Affairs Council will decide on this matter on July 16. However, this may be politically challenging due to the influence of countries like France, Italy and Poland.
Overall, Finland’s success in avoiding the deficit procedure is a result of careful planning and difficult decisions made by the government. It is a testament to their commitment to maintaining stable economies and healthy public finances as recommended by the spring package of the EU semester of economic policy.
