Overview
- Brussels forecast Germany’s 2025 deficit at 3.1% of GDP and around 4.0% in 2026, judging the overshoot fully covered by the national defense exception and declining to open a procedure.
- The Commission expects Finland’s deficit at about 4.5% in 2025, 4.0% in 2026, and 3.9% in 2027, finding the breach only partly explained by military outlays and proposing a formal deficit procedure.
- The updated Stability and Growth Pact provides a four‑year, defense‑related exemption allowing certain spending of up to 1.5% of GDP to be excluded in compliance assessments.
- The proposed procedure against Finland requires approval by EU finance ministers, and monetary penalties remain possible in theory though none have ever been imposed.
- Nine EU countries are already under deficit procedures, including Austria, Belgium, France, Hungary, Italy, Malta, Poland, Romania, and Slovakia.