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ECOFIN Launches Excessive Deficit Procedure for Finland

Published January 20, 2026, 12:45

The Economic and Financial Affairs Council of the European Union (ECOFIN) decided today to launch the excessive deficit procedure for Finland, as the state deficit exceeded the 3% of GDP limit set by the Stability and Growth Pact. The decision is accompanied by a recommendation to Finland outlining the path and timeline for reducing the deficit by 2028. Finland's deficit reached 4.4% of GDP in 2024 and is expected to remain at 4.3% in 2025. Although the country has used the national derogation clause for defense spending, allowing for a deficit of up to 1.5% without triggering the procedure, this is not sufficient to justify the current level. The Council is requesting Finland to take effective measures and submit relevant plans by April 30, 2026. Furthermore, it requires that the rate of increase in net public expenditure does not exceed 2.5% in 2026, 4.1% in 2027, and 5.9% in 2028. The Stability and Growth Pact aims to keep deficits below 3% of GDP and public debt below 60% of GDP. The excessive deficit procedure aims to strengthen fiscal sustainability through enhanced monitoring and recommendations for effective action.