欧洲财政协定

The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG, or more plainly the Fiscal Stability Treaty is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic and the United Kingdom. The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior to this date. As of 3 April 2019, it had been ratified and entered into force for all 25 signatories plus Croatia, which acceded to the EU in July 2013, and the Czech Republic.

The Fiscal Compact is the fiscal chapter of the Treaty (Title III). It binds 23 member states: the 21 member states of the eurozone, plus Denmark and Romania, who have chosen to opt in. It is accompanied by a set of common principles.

Member states bound by the Fiscal Compact have to transpose into their national legal order the provisions of the Fiscal Compact. In particular, the national budget has to be in balance or surplus, under the treaty's definition. An automatic correction mechanism has to be established to correct potential significant deviations. A national independent monitoring institution is required to provide fiscal surveillance. The treaty defines a balanced budget as a general budget deficit not exceeding 3.0% of the gross domestic product (GDP), and a structural deficit not exceeding a country-specific Medium-Term budgetary Objective (MTO) which at most can be set to 0.5% of GDP for states with a debt‑to‑GDP ratio exceeding 60% – or at most 1.0% of GDP for states with debt levels within the 60%-limit.……

History

Background

Monetary policy in the eurozone (the EU countries which have adopted the Euro) is determined by the European Central Bank (ECB). Thus, the setting of central bank interest rates and monetary easing is in the sole domain of the ECB, while taxation and government expenditure remain mostly under the control of national governments, within the balanced budget limits imposed by the Stability and Growth Pact. The EU has a monetary union but not a fiscal union.

Response to the euro area crisis

Starting from early 2010, the proposal to create a much greater fiscal union, at least in the eurozone, was considered by many to be either the natural next step in European integration, or a necessary solution to the euro area crisis.……

Content

The treaty is divided into 6 titles. The first explains that the aim of the treaty is to "strengthen the economic pillar of the economic and monetary union" and that the treaty should be fully binding on Eurozone countries. Title II defines its relation to EU laws and the Treaties of the European Union, applying the Fiscal Compact only "insofar as it is compatible". Title VI contains the final clauses regarding ratification and entry into force.

Three Titles (III-V) contain the rules regarding fiscal discipline, coordination and governance.

Title III – Fiscal Compact

Balanced budget rule: General government budgets shall be "balanced" or in surplus.……

Ratification and implementation

In December 2012, Finland became the twelfth eurozone state to ratify the treaty, thus triggering its entry into force on 1 January 2013. For subsequent ratifiers, entry into force is on the first day of the month following their deposit of the instrument of ratification. Slovakia became a party to the treaty on 1 February 2013, as did Hungary, Luxembourg and Sweden on 1 June 2013, Malta on 1 July 2013, Poland on 1 September 2013, the Netherlands on 1 November 2013, Bulgaria on 1 February 2014 and the last signatory Belgium on 1 April 2014.……

Ratification process

After a country has completed its domestic ratification, it must deposit an instrument of ratification with the depositary (the General Secretariat of the Council of the European Union) to complete the process.……

Fiscal compliance

The compliance of last years fiscal account and the equally important forecast fiscal accounts, with the criteria set by the Fiscal Compact, is summarized for each EU member state in the table below. The figures stem from the economic forecast published by the European Commission in November 2018, basing its forecast figures on the government's already implemented fiscal budget law 2018 and its recently proposed fiscal budget law for 2019.……