The European Commission is expected to consider launching an excessive deficit procedure (EDP) against Finland in December after concluding that the country no longer complies with the European Union&rsquo;s fiscal deficit rules, Finland&rsquo;s Ministry of Finance said.
Under EU regulations, member states must keep their general government deficit below 3% of gross domestic product (GDP). 
Finland breached this threshold last year and is projected to remain above the limit for the coming years, according to the Commission&rsquo;s latest review.
Finance Minister Riikka Purra said the findings were anticipated. 
&ldquo;The Commission&rsquo;s assessment did not come as a surprise, as Finland&rsquo;s public finances have continued to deteriorate,&rdquo; she noted. 
&ldquo;We will find out in December how quickly the EU expects us to correct the situation. The corrective measures will be up to us.&rdquo;
Finland currently has a national &ldquo;escape clause&rdquo; for 2025&ndash;2028 due to increased defence spending. 
However, the Ministry of Finance said the clause no longer justifies this year&rsquo;s excessive deficit, rendering the Commission&rsquo;s earlier conclusions invalid.
The EDP, part of EU fiscal governance, obligates member states to reduce excessive deficits and may lead to sanctions for eurozone countries that fail to implement corrective actions. 
Nine EU member states are presently under the procedure; Finland would be the tenth if the process is initiated.
In December, the Commission is expected to propose a Council decision confirming Finland&rsquo;s excessive deficit and to outline recommendations, which may include a &ldquo;corrective net expenditure path&rdquo; and a deadline to bring the deficit back under the 3% threshold.
EU finance ministers are slated to discuss the proposal during the Economic and Financial Affairs Council meeting in January 2026. 
If they approve the move, Finland will have three months to submit its initial report detailing planned corrective measures.
&mdash;IANS

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EU moves closer to opening deficit action against Finland over rising fiscal gap

November 26, 2025 | 11:04 IST