EU launches excessive debt action against five nations
(BRUSSELS) - The European Union launched action against Latvia, Lithuania, Malta, Poland and Romania on Tuesday over excessive national budget deficits brought on by the economic crisis.
The action was taken by EU finance ministers at a meeting in Brussels.
Under EU rules, the member countries are supposed to keep their budget shortfalls to less than three percent of gross domestic product (GDP) although they are allowed some leeway when the economy sours.
However many EU countries are expected to breach the limit this year as the downturn hits. Deficit procedures were recently launched against France, Greece, Ireland and Spain.
The ministers gave Latvia, which has been granted international loans to deal with the fallout from the crisis, until 2012 to bring its deficit under the three-percent ceiling.
Malta was given until next year, Lithuania and Romania have until 2011 and Poland will have until 2012.
It means that 11 countries are now under fire for exceeding the ceiling last year. According to European Commission forecasts, the budgets of 20 nations will break EU rules by the end of this year.
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