The European Union (EU) announced on Monday that it was closing the excessive deficit procedure it had imposed on Greece since 2009, thus rewarding the country for its efforts to reform its economy. Three countries – France, Spain and the United Kingdom – remain under the excessive deficit procedure, down from 24 in 2011.
An excessive deficit procedure enables the European Commission to place under surveillance any country that fails to respect the EU’s convergence criteria. They can ultimately receive fines, but, for now, that has never happened.
The Commission had recommended closing the procedure against Greece in mid-July. That proposal was formally validated on Monday morning by the EU Council, which represents member States.
“After many years of severe difficulties, Greece’s finances are now in better shape,” Estonia’s Finance Minister, Toomas Toniste, whose country currently occupies the EU’s rotating chairmanship, said in a press release.
For years, Greece’s budget deficit had far exceeded the EU limit of 3.0% of GDP, set by treaty. The country was placed under the procedure in 2009, when its deficit topped 15.1% of GDP. However, it succeeded in achieving a surplus of 0.07% of GDP in 2016 and should stay under the 2.0% and 3.0% ceilings in 2017 and 2018, the Commission forecasts.