Germany unlikely to fall foul of EU deficit rules
Germany's new conservative-led coalition government has said it does not expect a planned spending spree, including on defence, to be found in breach of EU rules that cap budget deficits at 3% of GDP.
Berlin's budget deficit is expected to come in at 3.3% of GDP this year, but since defence spending fully accounts for the amount over 3%, Germany "is likely not to end up in (the) excessive deficit procedure" Dombrovskis was quoted as saying in the FT interview published Sunday.
An excessive deficit procedure allows the Commission and EU finance ministers to issue recommendations on setting a corrective course to bring a member state's deficit back within the 3% limit. A country's failure to do so can in principle eventually lead to a fine.
"We have to see the execution, because it's close (but) if everything holds, then it should not be the case for this year's budget," Dombrovskis said, adding that a final assessment would take place in the spring when data for 2025 is available.
Under the EU's new fiscal rules, which the previous German government helped negotiate, member states can exclude some defence spending from their deficits.
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