“In light of the evaluation contained in the report, the initiation of an Excessive Deficit Procedure (EDP) for Finland is warranted,” the European Commission stated in a communiqué, further indicating that it will propose to the European Union (EU) Council “the initiation of an excessive deficit procedure for Finland,” along with “a recommendation to terminate the excessive deficit situation.”
Finland thus joins the ranks of the nine other member states subject to the excessive deficit procedure, including Austria, Belgium, France, Hungary, Italy, Malta, Poland, Romania, and Slovakia, which are currently suspended.
Brussels assessed that Finland’s public administration deficit for 2024 surpassed the 3% GDP reference value, not fully justified by invoking the national exception clause—allowing expenditure towards the defense industry.
Within the European Semester—the annual framework for coordinating the EU’s economic, budgetary, social, and employment policies during which member states align their budgetary and economic strategies with the bloc’s agreed objectives and rules—the European Commission adopted the provisional budgetary plans (PBPs) for 2026 of 17 euro area member states. Spain and Belgium have yet to submit their plans, while Austria was evaluated in June.
The Commission concluded that 12 PBPs are in compliance with the rules, including Portugal, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, and Slovakia. Three are at risk of non-compliance (Croatia, Lithuania, and Slovenia), and two others (Malta and the Netherlands) risk material non-compliance. Member states are advised to take necessary measures within their national budgetary processes to ensure fiscal policy in 2026 aligns with the Council’s Recommendation. These include Malta and the Netherlands.
Countries at risk of non-compliance will need to “take necessary measures within their national budgetary processes to ensure fiscal policy in 2026 aligns with the Council’s recommendation.”
Brussels also reviewed the budgetary developments and outlook in other member states, noting that Austria, Belgium, Czech Republic, Denmark, Sweden, Poland, and Romania are in compliance. Bulgaria, Hungary, and Spain fall into the category of economies at risk of non-compliance.
The Commission will present an updated assessment of the budgetary developments of all member states in spring 2026, as part of the European Semester’s spring package.
The forum of eurozone finance ministers (Eurogroup) along with the EU Council will now deliberate on the submitted documents to approve the made recommendations.
[Article updated at 14:49]
