The Council has formally found an excessive deficit in Finland, with a 2024 general government deficit of 4.4% of GDP against the 3% Treaty reference value. A national escape clause activated in July 2025 for defence spending does not cover the full extent of the excess, preventing it from blocking the EDP.
Council Decision (EU) 2026/1025, adopted on 20 January 2026 and now published in the Official Journal, formally triggers the excessive deficit procedure against Finland under Article 126(6) TFEU. Finland’s general government deficit reached 4.4% of GDP in 2024; its debt stood at 82.5% of GDP. The 2025 planned deficit was reported at 4.3% of GDP. The Commission Autumn 2025 Forecast projects the deficit remaining above 3% through 2027, meaning the excess is neither temporary nor close to the reference value, the two conditions that would allow relevant factors to outweigh a breach.
The legally interesting dimension concerns the national escape clause activated by the Council on 8 July 2025 to facilitate Finland’s increase in defence expenditure for the period 2025–2028. Under Article 2(5) of Regulation (EC) No 1467/97, the Commission and Council may decide not to open an EDP if a national escape clause is in force. However, the Commission found that even excluding defence expenditure increases since 2021, Finland’s 2025 deficit would still reach 3.4% of GDP, above the Treaty reference value. The escape clause therefore cannot explain or absorb the full excess. Article 2(5) does not apply, and the EDP proceeds.
The Commission’s report under Article 126(3) TFEU treated the 2024 and 2025 deficits as exceptional due to adverse macroeconomic conditions and the fiscal impact of Russia’s war of aggression against Ukraine. However, under the reformed SGP framework (Regulation (EU) 2024/1264), exceptionality does not block the EDP where the deficit is above and not close to the reference value and not temporary. Both conditions are met in Finland’s case. The debt criterion assessment is deferred: Finland’s debt exceeds 60% of GDP, but the compliance assessment under the new net expenditure framework requires 2025 outturn data, available in spring 2026.
The next procedural step is a Council recommendation under Article 126(7) TFEU setting a deadline for Finland to bring the deficit below 3% and specifying annual fiscal adjustment requirements. Finland joins seven other Member States currently under EDP, in the largest simultaneous cohort since the post-2009 crisis round. The Commission is expected to make recommendations for all Member States by summer 2026.
