EU fiscal rules

EU fiscal rules set a framework for the management of public finances in the Member States. The rules are part of economic governance. Key treaties include the Treaty on the Functioning of the European Union and the Stability and Growth Pact.

Treaty on the Functioning of the European Union

The Treaty sets the following reference values for Member States:

General government deficit cannot exceed 3 per cent of GDP (unless the deviation is small, temporary and exceptional).
General government debt cannot exceed 60 per cent of GDP (unless the amount of debt is decreasing and approaching the reference value at a sufficient rate).

The Stability and Growth Pact

The Stability and Growth Pact (SGP) is a rules-based framework for the coordination of national fiscal policies in the European Union. The SGP is comprised of two parts:

The cornerstone of the preventive arm is the Member States' medium-term fiscal-structural plans, which include a net expenditure path, reforms and investments. A Member State is within the preventative arm if it is not in an Excessive Deficit Procedure (EDP).
The corrective arm of the SGP relates to the thresholds of 3 per cent of GDP for general government deficit and 60 per cent of GDP for general government debt, as defined in the Treaty. If the Commission and the Council find that a Member State is in breach of the deficit or debt criteria, an EDP may be initiated. A Member State is within the corrective arm if is in an EPD.

Reformed rules

The fiscal rules were reformed in April 2024. One key reform is that every Member State must make a fiscal-structural plan spanning at least four years. In Finland, this plan is called the Medium-Term Plan.

In their plans, each Member State commits to complying with a net expenditure path, i.e. a maximum permitted growth rate for net expenditure. The net expenditure path is based primarily on the country’s debt sustainability. The plan also includes reforms and investments.

Member States are allowed to ask for an extension of the fiscal adjustment period by up to three years if they commit to structural reforms and investments. The EU monitors the implementation of these reforms and investments.

The European Commission assesses Member States’ fiscal-structural plans, and the Council of the EU endorses the net expenditure paths and extensions.

National documents submitted to the EU

Finland's Medium-Term Plan meets the requirement to submit a national medium-term fiscal-structural plan set by the EU's fiscal rules. Compliance with the plan is monitored through annual progress reports submitted by the Member State.

Euro area countries submit their Draft Budgetary Plans (DBP) for the upcoming year to the EU annually on 15 October at the latest.

Finland's Medium-Term Plan 2025–2028 (Valto, Institutional Repository for the Government)
Draft Budgetary Plan 2025 (Valto, Institutional Repository for the Government)

Progress report (Appendix 4 of the General Government Fiscal Plan, Valto, Institutional Repository for the Government)

Ministers letter on activation of the National Escape Clause

Appendices of the progress report:

Appendix 1. Implementation of the country-specific recommendations (CeSaR)
Appendix 2. Implementation of the recovery and resilience plan (Fenix)
Appendix 3. Implementation of the European Pillar of Social Rights
Appendix 4. Implementation of the UN Sustainable Development Goals

Publications from previous years:
Institutional Repository for the Government (Valto)

Finland avoids EU excessive deficit procedure (press release 4 June 2025)

Government approves Finland's Medium-Term Plan (press release Oct 10th, 2024)

Press release on Finland's fiscal-structural plan (press release in Finnish, Sept 23rd, 2024)

Economic governance framework (Council of the EU)

Excessive deficit procedure (Council of the EU)

Stability and Growth Pact (European Commission)

European Commission reports on Finland