If these countries fail to comply with the EU’s budget rule in 2017 they risk facing fines and restrictions on access to European funds.
According to Brussels, each of those countries has broken the Stability and Growth Pact (SGP) which is designed to ensure that all members stay within agreed budget limits – particularly on running up debts.
The SGP prescribes that each of the EU’s members should not run a budget deficit exceeding three percent of GDP. The government of the above-mentioned eight countries now will have to arrange their budgets for 2017 in a way to keep the deficit below three percent of GDP (for certain countries the limit is 2.5 percent).
Moreover, public debt is considered excessive under the Pact if it exceeds 60 percent of GDP without diminishing at an adequate rate.
If the countries fail to comply with the rules they can face a fine of 0.2 percent of GDP.
Now, the Italian economy is performing considerably badly than the government planned. The authorities estimated that by 2017 the deficit would decrease by 1.9 percent of GDP.
Moreover, a large-scale crisis in Italy’s banking system adds to the situation. The country is suffering under a soured bank debt of €360 billion ($383 billion).
Spain is one of the main troublemakers for the EU’s budget regulation. In 2014-2015, the government was already accused of running an excessive budget deficit. Spain’s public debt has reached €1.107 trillion ($1.179 trillion), or 100.9 percent of GDP.
The poor economic performance is a result of the crisis in 2008-2009 when Spain saw a budget deficit of 11 percent of GDP. The government was expected to decrease the deficit to 4.2 percent by 2015, but in fact it was reduced only to 5.1 percent.
For non-compliance with the EU’s budget rule in 2017 Spain risks facing a fine of up to €2.16 billion ($2.3 billion).
However, after a series of successful structural changes to the Portuguese economy the government managed to reduce deficit only to 4.4 percent.
Portugal’s public debt was 130 percent of GDP in 2014, and by 2015 decreased only by one percent.
If Portugal fails to deal with the budget deficit the fine could reach up to €359 million ($382 million).
Currently, Finland runs a budget deficit of 2.4 percent of GDP. According to estimates by the European Commission, the deficit will reach to 2.5 percent by 2017.
The forecast also estimates that the Finnish economy will grow next year by 0.8 percent.
A slowdown in the Finnish economy is a result of a drop in exports in 2012-2014, which stemmed from a crisis in the paper industry, the collapse of Nokia and the partial loss of the Russian market. In 2013, the Russian market accounted for 13.9 percent of Finnish exports.
As a result, Finland’s public debt reached 57 percent of GDP. The Commission estimates that Finland's general gross debt will increase to 68.1 percent of GDP in 2018.
Country’s two major banks Cyprus Popular Bank (Laiki) and Bank of Cyprus severely suffered from a massive write-down of Greek government bonds.
Cyprus’ public debt reached 111.7 percent of GDP. The government received a bailout package of €10 billion ($10.6 billion) to stabilize the situation.
Currently, Cyprus is gradually dealing with the consequences of the crisis. In 2015, growth reached 1.75 percent and nearly 3 percent this year. At the same time, Cyprus’ budget deficit is estimated at one percent of GDP.
The European Commission has fewer concerns over the Lithuanian economy. According to the country’s finance ministry, the budget plan for 2017 presumes a deficit of 0.8 percent of GDP.
The Lithuanian economy has been considerably damaged by falling exports to Russia due to Moscow’s responsive measures to Western sanctions.
In 2013, Lithuania’s public debt reached 39.4 percent of GDP. Now, the government is looking for new markets to stabilize the situation. Among the priority goals are cooperation with the United States and China.
Belgium was seriously affected the financial crisis in 2009 during which its budget deficit rose to a record high of 5.4 percent. Belgium’s public debt in 2009 increased to 96.2 percent.
Currently, the Belgian economy is recovering but its main economic indicators are still far from the required levels.
In 2015, deficit of the Belgian budget reached 2.6 percent of GDP.
In 2015, budget deficit on Slovenia increased to 2.9 percent of GDP. The country’s poor economic performance was a result of the 2013 crisis. At the time, public debt reached 71.7 percent of GDP.
In order to stabilize the situation, the Bank Assets Management Company took responsibility for the bulk of bad loans of small banks. However, the measure was not as successful as planned.