This document is an excerpt from the EUR-Lex website
The aim of the excessive deficit procedure (EDP) is that EU countries correct excessive deficit and/or debt levels. The European Commission can launch an EDP against an EU country not respecting the Stability and Growth Pact (SGP), a body of rules governing the coordination of EU countries’ fiscal policies.
In particular, the EDP can be launched if an EU country:
The SGP aims to safeguard sound public finances and has two arms:
The EDP is governed by Article 126 of the Treaty on the Functioning of the European Union and underpins the corrective arm of the EU’s SGP.
Every April, euro-area countries submit stability programmes to the Commission and to the Council, while non-euro-area countries submit convergence programmes to the same institutions. A stability or convergence programme must include the country’s medium-term budgetary objective as well as information as to how this will be achieved. It also contains an analysis of the effects of changes in the main underlying economic assumptions on the country’s fiscal position.
The programmes are examined by the Commission. If the criteria are not met, an EDP is launched by the Council based on recommendations by the Commission.
The EDP requires the country in question to provide a plan of the corrective action and policies it will follow, as well as deadlines for their achievement. Euro-area countries that do not follow up on the recommendations may be fined.