"8 member states are deviating from targets" - EU calls on states to limit budget spending
The European Commission warned that public spending in eight EU countries, including Spain, Hungary, Malta and the Netherlands, is deviating from agreed targets and risks non-compliance with the Union's budgetary rules. Under the current fiscal framework, the bloc's governments must keep budget deficits below 3% of GDP and public debt below 60% of GDP. The commission is assessing not only next year's budgets but also the credibility of long-term deficit plans.
“We call on member states to take the necessary measures to ensure compliance,” said European Commissioner for the Economy, Valdis Dombrovskis. “This is particularly important for countries under the excessive deficit procedure.”
The warning comes as EU capitals have secured more fiscal flexibility to bolster defense capabilities and boost industrial investment. The measures have come partly in response to US President Donald Trump's demand to spend at least 5% of GDP on defense by 2035. European governments are also finding it harder to comply with fiscal rules amid rising trade tensions with the United States.
On November 18, the Commission published its latest economic forecast, which predicts the EU economy will grow by 1.4% despite a tripling of US tariffs to 15%. Poland and Spain are leading the expansion, with projected growth rates of 3.2% and 2.9% in 2025, which are differentiated from the rest of the bloc. Meanwhile, the EU’s three largest economies, Germany, France and Italy, are growing at minimal rates.
However, the Commission warns that the medium-term growth outlook remains uncertain, even though the economic hit from the higher tariffs turned out to be smaller than initially expected. Brussels also stressed that, based on the preliminary budgetary plans of Croatia, Lithuania and Slovenia, these countries need to take additional steps to ensure that their fiscal policies for 2026 are in line with the agreed commitments.
Spain has yet to submit its preliminary budget for 2026, but along with Bulgaria and Hungary, it has been identified as a country at risk of breaching the bloc's fiscal rules, due to net spending rising beyond the limits set. For now, the Commission has only warned these countries to cut spending in 2026, but if the recommendations are ignored, Brussels could propose fines at the next budget review in the spring.
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