The European Commission has recommended disciplinary action against France and six other EU countries for running excessive budget deficits, breaching the Maastricht Treaty rules. This comes as the rules, suspended during the COVID-19 pandemic, were reimposed, requiring member states to keep public debt below 60% of GDP and deficits below 3%. France, along with Belgium, Italy, Hungary, Malta, Slovakia, and Poland, have been identified as not doing enough to control their deficits. Disciplinary procedures may lead to penalties, with France facing a potential fine of up to 2.5 billion EUR. The decision on establishing the existence of an excessive deficit will be made by the council in July, with recommendations for correction not proposed until November.
- The European Commission has recommended disciplinary action against seven EU countries for excessive budget deficits.
- Member states are required to keep public debt below 60% of GDP and deficits below 3% as per the Maastricht Treaty.
- France, Belgium, Italy, Hungary, Malta, Slovakia, and Poland have been named for not adequately controlling their deficits.
- Disciplinary procedures could result in a penalty of up to 0.1% of GDP, amounting to about 2.5 billion EUR for France.
- The rules were suspended during the COVID pandemic but were reimposed this year, leading to the current disciplinary recommendations.
- France and Italy have kept their budget deficits high post-pandemic, in contrast to Germany, which brought its deficit below the EU’s 3% limit.
- France’s debt exceeded 110% of GDP and is expected to increase, while Germany’s debt is close to the 60% limit.
- The European Commission stresses that size of the economy does not grant leeway for overspending beyond set limits.
- Stock markets reacted, with Paris closing down nearly 0.8% following the EU’s warning.
- NVIDIA has overtaken Microsoft to become the world’s most valuable company, driven by the AI technology boom.
- NVIDIA’s market capitalization reached over $3.3 trillion, approximately the size of France’s GDP.
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