MNI: Brussels To Go Easy On France, Italy Deficit Action

The European Commission said Wednesday that most EU states currently in an Excessive Deficit Procedure have taken enough action to put the process into "abeyance" for now, although officials will continue to monitor their public finances and, should "big slippages" occur, then further action will be taken.

Brussels will note that the countries currently under an EDP have now taken effective action to contain the situation, namely Italy, Slovakia, Hungary, Poland, France and Malta.  Although small fiscal slippages have been seen in France and Malta, both authorities have made clear that they stand ready to take effective action.  

Romania -- which has been in an EDP since 2020  -- also faces the possibility that the EU will now suspend EU payments to the country and EU finance ministers will be recommended by the Commission to take such action against the country if no remedial action is taken by the country. 

Officials say that it could be the autumn of this year before such a step is agreed by the EU, giving Romania time to tackle the situation or face cuts in EU public funding in 2026. 

Austria also faces the risk of an EDP in 2026 if it continues to fail to address currently significant slippages in its fiscal plans, the EC will say. Austria averted an EDP process earlier this year by announcing spending cuts. 

Ireland, Cyprus, Luxembourg and Netherlands will also be warned that they face bigger slippages in their fiscal plans in 2025 and will be told to take steps to correct this situation or face an EDP. Under the EU's revised fiscal rules, which have been operational for a year, the key criterion for launching an EDP is deviation from net spending targets as set out in their new medium-term fiscal structural plans.