Title page

Contents

Executive summary 1

1. Introduction 2

Risk 1. Defining the initial corrective path for countries subject to the EDP 5

Risk 2. Divergence from the MTFSP during the implementation of the corrective path agreed under the EDP 6

Risk 3. Exit from an EDP might be based only on achieving the 3 percent of GDP deficit, turning the framework into a 'free for all' 8

Conclusion 11

References 12

Boxes

Box 1. The new preventive arm of the SGP (Regulation (EU) 2024/1263) 2

Box 2. Escalating an EDP; a 'nuclear option' that will never be exercised? 7

Box 3. The lack of enforcement of the 1/20th rule: a cautionary tale 10