The stability and growth pact in EU has been discussed on several occasions over the years. At the core is that countries should keep their budgets close to balance to have room for letting the automatic stabilisers work also during periods of weak activity.
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.