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Economy and Finance

Stepping up or abrogating the EDP

The EDP will be stepped up for Member States for which the assessment shows that they have failed to take effective action to correct the excessive deficit in time. 

This means that they will receive revised recommendations, which may include a new timeline to address the excessive deficit.

For a euro area Member State, the stepping up of the EDP may result also in the imposition or strengthening of sanctions in the form of a fine of 0.2% of GDP, while all countries in receipt of assistance from the European Structural and investment Funds (ESIF) may face a temporary suspension of this financing.

With continued non-compliance, the fine for euro area Member States may be increased to include a variable component and imposed annually as long as the country in question continues to fail to take effective action. Since the 2011 reforms, reverse qualified majority voting (RQMV) – whereby a qualified majority of Member States is needed to reject a Commission proposal for a Council decision – is used for the imposition of most sanctions.

The EDP is abrogated when the excessive deficit is corrected in a durable manner and at this moment non-interest bearing deposits are returned to the Member States.