ZAGREB (Croatia), May 22 (SeeNews) - The European Commission said on Monday it has recommended to the Council to close the excessive deficit procedure (EDP) for Croatia because the country has brought its deficit below 3% of GDP.

Croatia's headline deficit decreased to 0.8% of GDP in 2016 and is projected to rise slightly to 1.1% in 2017, before dropping to 0.9% of GDP next year, the Commission said in a statement.

The EDP is a corrective mechanism the European Union conceived to bring back the member states' budget deficits to below 3% of GDP and public debts to below 60% of GDP.

Croatia has been in the EDP since January 2014.

However, given that Croatia's general government gross debt-to-GDP ratio is projected to remain above the Maastricht Treaty reference value of 60%, the Commission explained that the EDP can only be abrogated if the Commission forecast indicates that the debt ratio fulfils the forward-looking element of the debt reduction benchmark.

The Commission is also recommending Portugal exit EDP. If this occurs, only four Member States (France, Spain, Greece and the United Kingdom) will remain under the corrective arm of the Stability and Growth Pact, down from 24 countries in 2011.