COMMENTARY: Croatia under Excessive Deficit Procedure

According to the European Commission’s (EC) autumn economic forecast for the next three years, European Commissioner for Economic and Monetary Affairs and the Euro, Olli Rehn, confirmed that Croatia will come under the EU’s Excessive Deficit Procedure (EDP). Croatia’s budget deficit is projected to rise well over the EU’s threshold of 3% (i.e. 5.4% in 2013, 6.5% in 2014, and 6.2% in 2015.) Public debt, which is nearing 60% of GDP, is expected to rise towards 64.7% in 2014, and 69% in 2015. Rehn expects the EC is going to propose corrective measures in Q1 2014.

The Excessive Deficit Procedure (EDP) is part of the Stability and Growth Pact (SGP), signed in 1997, generally referred to as its ‘’corrective arm’’. The EU uses the EDP to ensure that member states keep their deficit and public debt under control. The legal basis for the EDP is Article 126 Treaty on the Functioning of the EU (TFEU) and the EU Regulation (EC) 1467/97 on speeding-up and clarifying the implementation of the EDP…

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