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EU Launches Excessive Deficit Procedure for Finland

Published January 21, 2026, 05:14
EU Launches Excessive Deficit Procedure for Finland

The EU Council of Economics and Finance (Ecofin) has launched an excessive deficit procedure for Finland due to a fiscal deficit of 4.4% in 2024 and a projected 4.3% in 2025, exceeding the 3% of GDP limit. The EU believes that Finland’s use of the national derogation clause for defense spending does not fully cover its deficit. As a result, Finland is being asked to present effective measures to reduce the deficit and ensure fiscal discipline. The excessive deficit procedure is part of the Stability and Growth Pact and does not entail immediate sanctions, but rather enhanced economic supervision. If Finland does not take the necessary measures, the EU may impose warnings or financial penalties in the future. On the sidelines of the meeting, the Cypriot Minister of Finance, Makis Keravnos, stated that discussions will take place regarding the EU’s countermeasures package against the US, but directions are expected from the extraordinary European Council.