Monday

1st Mar 2021

Czechs abandon EU fiscal pact, for now

  • Necas (l), Cameron (c) and Sarkozy - the Czech decision came as a surprise (Photo: consilium.europa.eu)

The new EU treaty on fiscal discipline will be signed by 25 instead of 26 member states after the Czech Republic on Monday (30 January) joined the UK in staying out of the pact.

Czech Prime Minister Petr Necas told journalists at a summit in Brussels that his country might join in future.

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

"I could not express my approval of this treaty but I consider it was extremely important that a consensus was reached on article 15 that it will be possible to opt in and to accede to this treaty without any requirement for negotiations. So this treaty remains open for future accession," he said.

He explained that he stayed out for three reasons: because non-euro countries will not be able to participate in all eurozone summits; because the treaty does not pay enough attention to debt; and because it would face "complicated ratification" back home.

Czech President Vaclav Klaus has said he will not sign the document. But he is due to step down in March 2013, removing the obstacle.

Going into the summit, Poland had made the most noise about refusing to sign unless non-euro countries get a seat in eurozone events.

But in the end it agreed to a compromise in which non-euro-using signatories will participate at least once a year and will take part in all summits which discuss competitiveness or changes to the "architecture" of the eurozone.

"A treaty at 25 is quite an achievement, given that the eurozone itself comprises of only 17 members," EU council chief Herman Van Rompuy said. He noted that all eurozone summits will also be preceded by 27-level summits "unless it is justified by exceptional circumstances" in a set-up which guarantees the "unity" of the bloc.

The intergovernmental treaty obliges signatories to enshrine a 'balanced budget' rule in their binding legislation - "preferably constitutional" - and to create "automatic correction mechanisms" at national level in case they overstep the budget deficit limit.

The European Court of Justice can impose fines of up to 0.1 percent of the country's gross domestic product if the budget rule is not transposed correctly. The collected money will be transferred to the permanent eurozone fund - the European Stability Mechanism - which will enter into life in July, or to the general EU budget in the case of fines of non-euro-using signatories.

Access to ESM bail-out money will be made conditional on signature and implementation of the pact. The ESM will also run in parallel to another bail-out fund, the EFSF, for six months - with a combined lending power of around €750 billion - before the EFSF is shut down.

The conditionality was needed to unblock German resistance to what is seen as the next stage in EU's struggle to cope with the eurozone's sovereign debt crisis: raising the ESM/EFSF ceiling to €1 trillion.

For his part, British leader David Cameron - whose veto of an EU Treaty change back in December created the intergovernmental mess - was less concerned about EU unity.

He agreed to let the group-of-25 use EU institutions like the European Court of Justice and the European Commission to enforce their fiscal rules. But he said: "We will watch like a hawk to see if do they encroach on the single market. If they do, we will take appropriate action."

He added that the new pact will not solve the crisis because it does not say how to boost EU competitiveness.

And he showed no regret on unravelling the EU Treaty change project. "There isn't a Brussels treaty because I vetoed it," a cheerful Cameron told press.

Czech government to give up EU Charter opt-out

The Czech Republic is to abandon its opposition to the EU's charter of rights and the fiscal compact treaty in a sign that there could be warmer relations between Prague's new government and Brussels.

Czech government backs EU fiscal pact

The Czech government has agreed to adopt the EU's fiscal pact, as centre-left PM Bohuslav Sobotka continues to tread a more pro-EU path.

News in Brief

  1. China sees rapid decline in press freedom, foreign journalists
  2. UK already vaccinated more than 20m people
  3. Serbia attacks EU 'vaccine passport' idea
  4. Germany tightens controls on French border
  5. Pfizer vaccine possibly less effective in obese people
  6. Iran says it will not attend talks with US on nuclear deal
  7. Police injured in Irish anti-lockdown protests
  8. EU leaders restate defence 'autonomy' plan

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 MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance
  2. UNESDAEU Code of Conduct can showcase PPPs delivering healthier more sustainable society
  3. CESIKlaus Heeger and Romain Wolff re-elected Secretary General and President of independent trade unions in Europe (CESI)
  4. Nordic Council of MinistersWomen benefit in the digitalised labour market
  5. Nordic Council of MinistersReport: The prevalence of men who use internet forums characterised by misogyny
  6. Nordic Council of MinistersJoin the Nordic climate debate on 17 November!

Latest News

  1. EU ambassador in hot water over Cuba letter
  2. 'Big Five' tech giants spent €19m lobbying EU in 2020
  3. Women fighting Covid-19 in focus This WEEK
  4. Ethiopia right of reply
  5. Time to choose on Russia: regime first or people first?
  6. Armenia 'coup' shows waning of EU star in South Caucasus
  7. 'Difficult weeks' ahead, as variants spread across EU
  8. EU top court advised to strike down Hungary's asylum policy

Join EUobserver

Support quality EU news

Join us