The European Commission has recommended the removal of Germany and Bulgaria from a list of countries facing the threat of sanctions after they brought their deficits under the EU limit.
The commission said excessive deficit procedures against the pair could be lifted after Germany cut its shortfall to 1.0% in 2011 and Bulgaria reduced it to 2.1%.
This is well below the EU ceiling of 3% of economic output.
"The commission has concluded that the correction of the excessive deficit for these countries is ensured," the EU's executive arm said in a statement, noting that they would "remain durably below 3.0%."
The European Commission said it has forecast that the German deficit will shrink to 0.9% in 2012 and 0.7% in 2013 while Bulgaria's will fall to 1.9% and 1.7%.
The recommendation, if endorsed by EU leaders in late June, will leave 21 of the EU's 27 member states under deficit proceedings, including France, Italy, Spain and Britain.
Estonia, Finland, Luxembourg and Sweden are the only other countries that have avoided the excessive deficit procedure.
The EU tightened its debt and deficit rules late last year, making it easier to impose sanctions on governments that repeatedly fail to rein in spending.
