Even if the European Union has a single currency, the euro, economic policy is mainly in the hands of national governments, although with EU level coordination and common rules on sound public finances.
Article 104 of the Treaty establishing the European Community (TEC) lays down rules on the avoidance of excessive government deficits. It is complemented by the Protocol on the excessive deficit procedure, annexed to the treaty.
In addition, there is Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community, which has been substantially amended several times.
In the interests of clarity and rationality Regulation 3605/93 has now been replaced by a codified Regulation:
Council Regulation (EC) No 479/2009 of 25 May 2009 on the application of the Protocol on the excessive deficit procedure annexed to the Treaty establishing the European Community (Codified version), published in the Official Journal of the European Union (OJEU) 10.6.2009 L 145/1.
The new and codified Regulation 479/2009 is the reference for those who want to look into the finer details of the procedure. Given the economic climate and the development of government finances, there will be more than a few to find an interest.