The EU executive made its assessment yesterday (27 January) as part of the Union's budget discipline procedure, under which countries receive deadlines to reduce their fiscal gaps to below 3% of gross domestic product.
"I am pleased to be able to conclude that Malta, Lithuania, Hungary and Latvia have all undertaken adequate steps towards correcting their budget deficits," EU Monetary Affairs Commissioner Joaquin Almunia said in a statement.
Latvian Prime Minister Valdis Dombrovskis said the Commission's report sent a good signal to markets.
"This European Commission report is also a positive signal to the international financial market, which allows one to forecast a gradual rise in Latvia's credit rating," he said in a statement.
Hungary and Latvia are among the hardest hit in Europe by the financial crisis. They have until 2011 and 2012 respectively to bring their deficits below the level from last year's respective levels of 3.9% of GDP and around 10%.
For Lithuania and Malta, the Commission recommended extending the deadlines for cutting their deficits by one year to 2011 and 2012 respectively. A final decision will be taken by EU finance ministers, but this is not considered a hurdle.
"In the case of Malta and Lithuania, however, the worsening in the economic situation since the recommendations were made justifies extending the deadline by one year," Almunia said.
The decision means the EU will not step up its budget discipline procedure against the four countries. The procedure could in theory lead to the stripping of some regional development aid.
The Commission said it would assess in the coming weeks whether Romania and Poland have taken action on their deficits.
Officials from the EU, the International Monetary Fund (IMF) and the World Bank have spent the past week meeting with the Romanian authorities to review the implementation of the policy programme put in place following a €20 billion multilateral assistance package. Overall, the support has helped stabilise the economy, the Commission said.
(EurActiv with Reuters.)
