EU launches excessive deficit procedure against Croatia

Tuesday 28 January 2014 13.03
Excessive deficit procedure for Croatia launched today
Excessive deficit procedure for Croatia launched today

The European Union decided to launch a procedure against Croatia to reduces its deficit, just seven months after it became the 28th member of the bloc.

"We have today opened an excessive deficit procedure for Croatia, as well as recommendations setting out measures to correct the deficit by 2016," Greek finance minister Yannis Stournaras said after meeting EU counterparts in Brussels.

The EU sets a ceiling for the annual budget deficit of member states at 3% of gross domestic product, with accumulated debt not to exceed 60%.

In November Croatia, which joined the European Union in July, said a revised 2013 budget would show a deficit of 5.5%, up from an initial estimate of 3.5%.

EU Economic Commissioner Olli Rehn said the bloc would review Croatia's plans to rein in its deficit in the spring. He said Croatia needed to take "decisive action" to restore confidence in the economy.

In the meantime Brussels was in "close and continuous contact with the Croatian government" about its proposals to cut the deficit.

"We want to look at them more closely, precisely, before we will make any kind of assessment," Commissioner Rehn said.

"We will make profound assessments on whether any progress has been achieved by Croatia by the spring," he said.