Countries under the excessive deficit procedure will now have four to seven years to take corrective action. From Wednesday to Friday, ambassadors from EU member states took a written vote on whether to launch the procedure.
Excessive Deficit Procedure. What does it mean?
In June, the European Commission officially placed Poland on the list of countries for which it recommended the launch of the excessive deficit procedure. The reason was the fact that our general government deficit in 2023 exceeded the threshold of 3 percent of GDP and reached 5.1 percent. What is more, according to the EC forecast, in 2024 it will be even higher and will amount to 5.4 percent of GDP. The finale of Friday's decision may be sanctions. For countries outside the zone euro This could mean, for example, suspending the payment of EU funds if they ignore the EC's recommendations. Poland has already been subject to such a procedure once – in 2009. After six years, the procedure was completed.
The media reported last monththat there were talks between the government and the EC about taking into account the so-called relevant factors, i.e. various types of important financial factors that affect the amount of the deficit. In the case of Poland, this is about defense spending, which is to lead to a more lenient approach Brussels to our country.
Minister Domański: I hope that the EC recommendations will be mild
Government will have to autumn send the European Commission a plan to reduce the deficit. – There are certainly countries with lower deficits, but we, having large military expenditures, invest in the defense of not only Poland, but the entire EU, so we should not be punished for this. I hope that the EC recommendations, if they appear, will be very mild – assessed the head of the Ministry of Finance Andrew Domański. The minister spoke about the excessive deficit procedure in February. – The procedure will of course be opened for us, because the previous government already declared a deficit significantly above 3% of GDP. I am optimistic about the EC recommendation that will be issued for us and I think that it will not require radical steps, especially in the context of reforming EU rules – he emphasized at the time. The EU procedure forces such reforms and management of state finances that gradually reduce excessive deficits.