The preventive arm of the stability and growth pact (SGP) supports EU governments in achieving their commitments on sound fiscal policies and coordination by setting for each country a budgetary target.
This benchmark is a rule which contains the net growth rate of government spending at or below a country’s medium-term potential economic growth rate, depending on the country's position in relation to its medium-term budgetary objectives (MTOs).
Legal basis and related stages
The Significant Deviation Procedure aims to give Member States the opportunity to correct a deviation from their medium-term objective (MTO) or the adjustment path towards their MTO in order to avoid the opening of an Excessive Deficit Procedure.