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Economy and Finance

Excessive Deficit Procedure under the Two Pack regulation

The Two Pack regulation, which entered into force on May 30, 2013, includes specific provisions on closer monitoring of euro area Member States in Excessive Deficit Procedure (EDP). 

These provisions aim to ensure that Member States take corrective action in a timely and durable manner, by increasing the scope and frequency of information to be submitted to the Commission and to the Council for their review.

Specifically, the legislation establishes a system of graduated monitoring, which includes regular reporting by the concerned Member State every 6 or 3 months, according to the stage of the procedure. This regular reporting will allow the early detection of a Member State at risk for not correcting its excessive deficit by the deadline set by the Council. If such a risk exists, the Commission may decide to issue a recommendation to the Member State to take further or different action.

The Two Pack also requires euro area Member States entering the EDP to draft economic partnership programmes (EPPs), which provide a roadmap for structural reforms considered as instrumental to an effective and lasting correction of the excessive deficit.