Malta, Latvia, Lithuania and Hungary are scheduled to appear in front of the European Union Commission (EC) to determine whether the countries have undertaken enough suitable action to address their ailing financial situations.
The meeting which was scheduled for January 27th, is part of the EC Excessive Deficit Procedure, initiated for all four countries when they posted national deficits that were considered to be too large. The procedure is aimed at determining whether each nation has taken adequate efforts to cut public spending and build public finances in order to improve primary economic sectors. Failure to take necessary measures could result in EU penalties or sanctions.
The EC Excessive Deficit Procedure is applied to any EU nation whose deficit reaches above 3 percent of national GDP or whose public debt rises above 60 percent of GDP. Due to falling tax revenues caused by the recent global economic recession, 20 EU jurisdictions are currently facing similar investigations. Although, the EC has stated that any nation facing extraordinary circumstances could be given extensions for their economic recovery plans.
Each of the four nations is required to report on the state of their fiscal recovery in the face of their EC set deadlines. Lithuania and Hungary were both allowed until 2011 to correct their ailing deficits, which reached 3.2 and 3.8 percent respectively, in 2008. Malta was allocated until the end of 2010 to correct its 4.7 percent deficit. Latvia was given until 2012 to implement corrective measures, although its faces the worst position, having reached a national deficit of 9 percent in 2009.
Photo by iamdat
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