Thursday

28th Oct 2021

New treaty in force when 9 countries have ratified

The first draft of a new treaty meant to tighten economic governance in eurozone countries was circulated Friday (16 December) with the aim to have the text finalised by January and coming into force once nine countries have ratified it.

The ratification threshold would allow the treaty to go into place even if some euro states - such as Ireland which may have to hold a referendum - are having problems getting domestic approval.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Political negotiations on the short 14-article text will begin next week (Photo: The Council of the European Union)

A euro country that rejected the treaty after it had already come into place will not be bound by it.

"If you go into the political aspect, I don't think it will be a very comfortable situation," said one EU official dealing with the issue.

Non-euro countries, who agree to sign up to the treaty, will be bound by the agreement as soon as they take on the single currency, but can put in place some of the details immediately.

Containing just 14 articles, the text obliges those that have ratified it to introduce into their constitutions a balanced-budget rule. The treaty also says that those countries that are in excessive deficit will have to submit "economic partnership plans" to the commission and council.

Sanctions will also be more automatic for fiscal miscreants while the text says that major economic policy reforms should be coordinated at the euro level.

It also makes what is seen as an oblique reference to tax harmonisation - a bug bear of countries such as Slovakia - by saying that countries "where appropriate and necessary" will use a fast-track integration process known as "enhanced cooperation."

"We put into the legal form the elements of substance that were contained in the statement of the 9 December (EU summit). We did nothing more. We did nothing less," said the EU official.

Negotiations on the text will start next week in the euro working group - which brings together senior treasury officials from across the member states.

Following the UK's refusal to allow full-blown treaty change, the pact is an intergovernmental treaty for the 17 euro states plus up to nine of the non-euro countries who have all indicated they will attempt to come on board.

But in a bid to draw a line under the potentially damaging rift between London and the rest of member states, all 27 countries will be at the negotiation table, although London will only have observer status.

The next negotiating meeting is set for the first week of January while the officials are hoping the text will be finalised by the end of January, and signed in March.

A treaty with bite?

By opting to go the international treaty route, negotiators are hemmed in by the fact that they are not allowed to alter the EU treaty in any way.

The same situation has raised legal questions about the legal capacity of the European Commission and European Court of Justice to enforce its provisions. This issue has exercised the finest legal minds in Brussels in the days since last week's summit.

The draft contains only vague language asking the treaty members to "undertake" to support proposals by the commission if they are in excessive deficit.

The European Court will judge whether the balanced budget rule has been properly transposed into national law.

Meanwhile member states would have to take each other to the European court - a politically awkward idea - if they considered that the excessive deficit rules were being broken.

Majority of French oppose fiscal treaty

A majority of French people are opposed to the recently agreed EU plans for a fiscal compact treaty, with opposition Socialist presidential candidate Francois Hollande calling for a renegotiation of the text.

Denmark stuck in EU treaty quagmire

Days away from taking over the EU's rotating presidency that will be responsible in part for steering through a new intergovernmental treaty, the Danish government has become stuck in a quagmire of domestic resistance to the so-called fiscal compact.

Ireland plans referendum body on possible EU treaty poll

Irish Prime Minister Enda Kenny has said he intends to establish a permanent referendum commission so that the public is fully prepared for a possible poll on the fiscal discipline treaty currently being drawn up by member states.

Doubts increase over usefulness of new fiscal treaty

Just a few days into the making of a new intergovernmental treaty on fiscal discipline, serious questions are being raised about whether the slight draft offered to date is either useful or necessary.

News in Brief

  1. France and UK on edge of fishing sanctions-war
  2. Israel agrees 3,000 more settler homes, despite EU criticism
  3. Italy blocks anti gay-bashing law after Vatican lobbying
  4. EU gives Moldova €60m amid Russia gas crunch
  5. Bulgaria risks full lockdown as Covid infections surge
  6. Irish goods traffic with EU grew 36 percent since Brexit
  7. Europeans want trains instead of short-haul flights
  8. Boom time for hackers in pandemic, EU agency warns

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. EU says No to patent-free vaccines for Africa
  2. COP26 climate summit: could it be different this time?
  3. EU top court orders Poland to pay €1m-a-day in rule-of-law row
  4. Revealed: EU migration plans for Morocco, Libya and others
  5. New EU banking rules ignore 'stranded assets', critics warn
  6. Israel's besmirching of Palestine NGOs must be reversed
  7. Environment ministers continue dogfight on energy price hike
  8. Most lawmakers unhappy with lead MEP's asylum bill

Join EUobserver

Support quality EU news

Join us