BREAKING BUDGET RULES

Highest deficit to GDP ratios

1. Italy: 7.4%
2. Hungary: 6.7%
3. France: 6.0%
4. Romania: 6.6%
5. Poland: 5.1%
6. Malta: 4.9%
7. Slovakia: 4.9%
8. Belgium:  4.4%

The above countries will need to negotiate a plan with Brussels to get back on track. A sate's debt must not go higher than 60% of national output, with a public deficit of no more than 3%.

Countries failing to remedy the situation can in theory be hit with fines of 0.1% of gross domestic product (GDP) a year, until action is taken to address the violation. In practice, though, the Commission has never gone as far as levying fines – fearing it could trigger unintended political consequences and hurt a state's economy.

Member states must send their multi-annual spending plans by October for the EU to scrutinise and the Commission will then publish its recommendations in November. Under the new rules, countries with an excessive deficit must reduce it by 0.5 points each year, which would require a massive undertaking. But the rules also now give greater flexibility for investment in critical areas like defense and the green and digital transition.