European Commission gives positive assessment to Greece’s 2026 budget — nine countries remain in the Excessive Deficit Procedure
The European Commission has issued a positive assessment of Greece’s draft budget for 2026 and its medium‑term fiscal plan as part of the Autumn package of the European Semester published today.
Presenting the budget assessments, Commissioner for the Economy Valdis Dombrovskis said that, of the euro‑area’s 20 member states, 17 submitted budget plans for 2026 (Belgium, Spain and Austria did not). For the 16 member states where the Council has activated the national escape clause, the Commission’s assessment takes into account allowed flexibility for higher defence spending.
Key fiscal compliance findings - Twelve countries are considered fully compliant with the Council’s fiscal recommendations and are invited to implement their planned fiscal policies for 2026 as scheduled: Greece, Cyprus, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Luxembourg, Portugal and Slovakia. - Five member states’ 2026 budgets are assessed as posing a risk of non‑compliance: - Risk of “non‑compliance”: Croatia, Lithuania, Slovenia. - Risk of “material non‑compliance”: the Netherlands, Malta. These five countries are called on to take the measures needed to ensure that their 2026 fiscal policies follow the Council’s recommendations. - Seven additional member states are assessed as compliant: Austria, Belgium, Czechia, Denmark, Sweden, Poland and Romania. - Three member states are assessed as at risk of non‑compliance: Bulgaria, Hungary and Spain.
Macroeconomic imbalances and assessments in 2026 - The Commission identifies possible macroeconomic imbalances for seven member states: Greece, Hungary, Italy, the Netherlands, Slovakia and Sweden — and for Romania, which in 2025 was classified as a country with excessive imbalances. These countries will be examined to determine whether the imbalances call for policy action. The in‑depth assessments will take place in the first half of 2026, and the Commission’s decisions will be included in the Spring package of the European Semester.
Nine countries in the Excessive Deficit Procedure (EDP) - Nine member states remain subject to the EDP: Austria, Belgium, France, Hungary, Italy, Malta, Poland, Romania and Slovakia. The procedure is currently suspended — meaning no further procedural steps are taken at this stage, but the process remains open and the countries are still expected to reduce deficits below the 3% of GDP Treaty threshold. The Commission will reassess their situation next spring when 2025 data are available. - The Commission also produced a report under Article 126(3) of the Treaty to assess the deficit criterion for Germany and Finland. It considers it “justified” to open an Excessive Deficit Procedure for Finland.
Post‑programme surveillance reports - The Commission published post‑programme surveillance reports for Ireland, Greece, Spain, Cyprus and Portugal (countries that previously received financial assistance). The Commission concludes that all five maintain the capacity to service their debt.
Recommendations for euro‑area economic policy in 2026 - Member states in the euro area are urged to ensure fiscal sustainability by following the Council‑recommended net expenditure paths, taking into account any allowed defence‑related flexibility. This should result in an overall neutral fiscal stance for the euro area in 2026. - The Commission recommends that governments reprioritise budget spending to support strategic investments, tackle bottlenecks in the defence industry, and promote joint procurement. Member states are also urged to complete implementation of their Recovery and Resilience Plans by 31 August 2026 to ensure full absorption of EU funds. - Other recommendations include strengthening labour markets, boosting investment in innovation and strategic sectors, and improving the functioning of the Single Market by simplifying rules and removing barriers.
New Council recommendation on human capital - For the first time the Commission proposes a Council recommendation on human capital, addressed to all 27 EU member states. It calls for urgent action to tackle structural challenges related to human capital that can harm competitiveness. - Member states are asked to prioritise education and skills needed in strategic sectors such as the green transition, circular economy, decarbonised industry, health and biotechnology, agriculture and the bioeconomy, defence industry and space.
Macro outlook and strategic challenges - The Autumn 2025 Economic Forecasts, which underpin the European Semester package, show that the EU economy remains resilient with moderate growth, supported by strong domestic demand, investment, a stable labour market and falling inflation. - At the same time, the EU faces strategic vulnerabilities and structural challenges — low productivity, demographic pressures and rising public finance demands linked to defence and the transition to a digital and carbon‑free economy. The Commission stresses that boosting competitiveness and maintaining sound public finances are essential to unlock growth potential and preserve stability.
Source: APE‑MPE (Hellenic News Agency)
