European standard of fault and Excessive Deficit Procedure

According to the Growth and Stability Pact, the public deficit in countries which have adopted the euro as their currency may not exceed 3 percent and public debt may not exceed 60 percent of GDP.
If a deficit exceeds this standard of fault, the member country enters the excessive deficit procedure. The procedure imposes an obligation for the country to reduce its deficit to a maximum of 3 percent. Sanctions may be imposed as well during this procedure. This will not be the case if the excessive deficit meets the following criteria:
- It is temporary in nature;
- It is the result of exceptional circumstances, for example an economic crisis.
Euro countries with a debt exceeding 60 percent of GDP must recover on average one-twentieth of the amount exceeding the limit on an annual basis.
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