In this way deficits can be kept below the 3 per cent maximum set by the Treaty without problems unless the downturn is extraordinary severe. In such cases sanctions will not be used. Denmark is also part of the stability and growth pact.
The biggest difference between Euro members and UK, Sweden and Denmark with respect to the pact is that sanctions cannot be given to the Out-countries. The stability and growth pact has been seen as framework for medium term fiscal prudence in Denmark, cf. Chart 6.