The Commission proposes an excessive deficit procedure for seven countries. These are Belgium, France, Italy, France, Hungary, Malta, Poland, and Slovakia.

With regard to Greece, the Commission notes that, like Italy, it has imbalances, including excessive imbalances found up to last year. As noted, vulnerabilities have been reduced but remain a concern. Fiscal sustainability risks will be monitored under the new fiscal rules.

Besides, the Commission adds that the post-monetary surveillance reports for Ireland, Greece, Spain, Cyprus, and Portugal conclude that all countries have the capacity to repay their debts.

As the Commission stresses, the report under Article 126(3) is only the first step in launching the excessive deficit procedure. Its aim is to propose to the Council that it open the procedure for these seven member countries in July 2024.

The new Stability Pact rules require countries with excessive deficits to reduce the deficit by at least 0.5 percentage points per year. The new rules provide for financial sanctions of 0.1% of GDP per year for countries that do not comply with recommendations to correct their budget deficits.