Monday

22nd Jan 2018

Handful of questions remain on EU fiscal treaty

  • EU finance ministers will look at the fourth draft of the fiscal compact next week (Photo: Council of the European Union)

Finance ministers will next week tackle the thorny little details still to be agreed before EU countries can bless a new pact on fiscal discipline.

A fourth draft of the slim document - meant to copperfasten budgetary prudence in the EU - is to be circulated on Thursday (19 January), but most of the outstanding issues have been left for finance ministers to sort out in the hope the pact will be ready in time for an end-of-the-month EU summit.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

One open question is determining the link between the permanent bail-out fund (the ESM) and the new intergovernmental pact. Germany - the main driver behind the treaty - is keen to have the intergovernmental agreement say only countries that have ratified it will be permitted to make use of the fund.

But according to an account on Monday evening (16 January) by Italian Socialist MEP Roberto Gualtieri - one of the European Parliament's observers at the negotiating table - other countries fear this would once again create uncertainty in the markets.

Finance ministers also have to decide whether to introduce sanctions for countries that breach the budget deficit rules. The current draft says member states can bring one another to court for such breaches or ask the European Commission to draw up a report on the fiscal miscreant.

Also open is how many euro countries need to ratify the treaty before it enters into force. The number has yo-yoed from the initial suggestion of nine, then to 15 and then back to 12. Germany wants a high number so that all struggling eurozone countries get on board.

On top of this, there is disagreement about wording in an article on economic policy co-ordination (Article 9). Opposing camps differ on whether to make mention of growth-enhancing measures and if so, on the nature of the reference.

Member states are also at odds on future eurozone summitry. An eternal question in EU politics, it concerns who has a right to be in the inner circle. Wording on the role of the European Parliament, the president of the European Commission and non-euro states still needs to be finalised.

"It's a very important point which has been left open," Gualtieri noted at an EU parliament hearing on Monday.

MEPs will be looking for the fourth draft to mention eurobonds in the introduction to the document - EU deputies are keen on the idea of mutualising eurozone debt, but it is fiercely opposed by Germany.

"There is a proposal by the commission - if it is accepted - of making reference in the recital of a path toward stability bonds. This would be at least an improvement in respect of a text that [is] only concentrated on fiscal stability without anything on growth and solidarity," Gualtieri added.

After the EU finance minister's meeting - on 24 January - member state delegates, or "sherpas", are to have one more meeting before EU leaders gather for the summit on 30 January.

EU leaders aim to announce a political agreement on the treaty next week and to sign the text at the March EU summit. With markets in recent months making EU decisions obsolete shortly after they are made, the ratification process is expected to last about one year.

Correction - The article previously said Roberto Gualtieri asked MEPs to endorse the pact. It should have said that Gualtieri asked them to endorse the amendments suggested by the three MEPs involved in negotiating the pact.

Softer draft of fiscal treaty opens door for UK

Less stringent constitutional demands, a weaker role for the EU commission and a provision allowing the UK to join at a later stage are among the most recent changes to the draft treaty on fiscal discipline.

News in Brief

  1. Belgium lowers terror alert level
  2. France, Spain set to gain seats in post-Brexit EU parliament
  3. Orban family probed over 'fraudulent' EU projects
  4. Spanish judge rejects Puigdemont arrest warrant
  5. Austria plans to sue Commission over Hungary's nuclear plant
  6. Puigdemont proposed as sole candidate for Catalan leadership
  7. Abbas in Brussels to discuss Palestinian state recognition
  8. Exiled Catalan leader leaves Belgium for first time

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  2. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  3. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  4. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  5. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  6. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  7. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  8. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  9. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  10. ACCAWelcomes the Start of the New Bulgarian Presidency
  11. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit
  12. EU2017EEVAT on Electronic Commerce: New Rules Adopted

Latest News

  1. EU stands by Palestine on Jerusalem
  2. MEPs may bar killer robots and drones from EU research cash
  3. Europe's social democrats are having a hard time
  4. How Oettinger's CO2 permit sale could fill Brexit blackhole
  5. New Polish foreign minister tries to charm EU commission
  6. Middle East, Messi and missing MEPs on agenda This WEEK
  7. Instagram and Google Plus join EU anti-hate speech drive
  8. EU wants 'entrepreneurship' in education systems