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Alignment with the EU economic governance framework and further simplification of that framework

TA-10-2026-0322 · P10_TA(2026)0322 · PE784.159

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Parliament's position at first reading amends Regulations (EU) No 1173/2011 and (EU) No 473/2013 to align them with the 2024 reform of the EU economic governance framework and to simplify it. It deletes the interest-bearing deposit for significant deviation, the delegated acts on statistical manipulation, and the distribution of fines, and sets fines of up to 0,02 % of GDP in the corrective arm. It aligns draft budgetary plans, national budgetary procedures and independent fiscal institutions with the net expenditure path and the national medium-term fiscal-structural plans. It cuts reporting duties: no ex ante Eurogroup reporting on debt issuance, no unchanged-policies plan where no draft budget is possible, and fewer elements in the Commission's euro area assessment. It replaces economic partnership programmes and sets follow-up reports on effective action every six months under Article 126(7) TFEU and every quarter under Article 126(9) TFEU. It requires the Commission to report on the application of both Regulations by 31 December 2030 and every five years thereafter.

Key points

  1. Regulation (EU) No 1173/2011 is recast as a system of sanctions for enforcing the corrective arm of the Stability and Growth Pact in the euro area.
  2. The requirement for a Member State to lodge an interest-bearing deposit for failing to comply with a significant deviation procedure is deleted.
  3. No fines are imposed where the excessive deficit procedure is in abeyance or where the Commission proposes fines under Article 126(11) TFEU; references to distributing fines are removed.
  4. If the Council decides a Member State has not taken effective action under Article 126(8) TFEU, the Commission recommends a fine of up to 0,02 % of the previous year's GDP, paid every six months until effective action is assessed.
  5. A fine decision is deemed adopted unless the Council rejects the Commission recommendation by qualified majority within 10 days; the Council may amend it by qualified majority.
  6. The power to adopt delegated acts on financial sanctions for manipulation of statistics is deleted, and sanctions under Articles 6 and 8 are of an administrative nature.
  7. The competent committee of the European Parliament may invite the President of the Council, the Commission and, where appropriate, the President of the European Council or Eurogroup to discuss decisions taken under Article 6.
  8. Member States' budgetary procedures must be consistent with recommendations under Regulation (EU) 2024/1263, Council recommendations and decisions under Regulation (EC) No 1467/97, decisions under Regulation (EU) No 1173/2011 and Directive 2011/85/EU.
  9. Member States must submit a draft budgetary plan to the Commission and the Eurogroup by 15 October each year, made public on submission, with specified content including net expenditure growth, measures, projections and defence spending.
  10. The draft budgetary plan must explain compliance with the Council-set net expenditure path or deviations from it, and, for Member States in excessive deficit procedure, compliance with the corrective net expenditure path.
  11. Member States must report ex ante and in a timely manner to the Commission on national debt issuance plans, but no longer ex ante to the Eurogroup.
  12. Member States under Article 126(7) TFEU recommendations submit follow-up reports on effective action every six months, and those under Article 126(9) TFEU notices every quarter, until the excessive deficit decision is abrogated; these may be included in annual progress reports and draft budgetary plans.

Who is affected

  • Member States whose currency is the euro: subject to the sanctions system and the reporting and budgetary plan rules.
  • Member States in excessive deficit procedure: must submit follow-up reports on effective action and explain compliance with the corrective net expenditure path.
  • Member States subject to a macroeconomic adjustment programme: not subject to Articles 6, 7, 8 and 10 of Regulation (EU) No 473/2013.
  • Independent fiscal institutions: definition aligned to Article 8a of Directive 2011/85/EU; opinions on forecasts become mandatory from 2032 if capacity is sufficient.
  • The Commission: must publish reports on application of both Regulations by 31 December 2030 and every five years thereafter.

Figures and deadlines

  • Fine of up to 0,02 % of the latest estimate of the previous year's GDP, paid every six months until effective action is assessed.
  • Commission must recommend a fine within 20 days of the Council decision under Article 126(8) TFEU.
  • Council must reject the Commission's fine recommendation within 10 days for the decision to be deemed adopted.
  • Draft budgetary plans must be submitted by 15 October each year.
  • Commission opinion on particularly serious non-compliance within two weeks of submission; revised plan within three weeks of the opinion; new opinion within three weeks of the revised plan.
  • Follow-up reports on effective action every six months under Article 126(7) TFEU and every quarter under Article 126(9) TFEU.
  • Commission reports on application of the Regulations by 31 December 2030 and every five years thereafter.
  • From 2032, independent fiscal institution opinions on macroeconomic forecasts become mandatory if sufficient capacity is built.

Legal basis: Article 121(6) in conjunction with Article 136 of the Treaty on the Functioning of the European Union.