By Micah Jonah
January 22, 2026
European Union finance Ministers have begun formal disciplinary steps against Finland for running a budget deficit above the bloc’s legal limit, giving the country until 2028 to bring the shortfall within the required ceiling of 3 percent of gross domestic product.
Finland recorded a budget deficit of 4.4 percent of GDP in 2024 and an estimated 4.3 percent in 2025, figures that remain above EU rules despite being lower than those of some other member states currently under similar procedures. EU officials said increased defence spending linked to security concerns does not fully explain the scale of Finland’s deficit.
Under the Excessive Deficit Procedure, countries are required to implement fiscal reforms and meet set targets within specific deadlines. Failure to comply can lead to stronger enforcement measures and, for euro zone members, possible financial penalties such as fines or interest bearing deposits.
EU finance ministers said Finland must present concrete measures by April 30, 2026, to reduce its deficit. The strategy will focus on strict control of government spending, with limits placed on how fast public expenditure is allowed to grow over the coming years.
According to the Council’s recommendations, Finland’s cumulative net spending growth should not exceed 2.5 percent in 2026, 4.1 percent in 2027 and 5.9 percent in 2028. These limits are intended to ensure the country gradually returns to compliance with EU fiscal rules while maintaining economic stability.
