23rd Mar 2018

Czechs abandon EU fiscal pact, for now

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

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.

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.

"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.

VW dismisses complaints on Dieselgate fix

'I think customers who want to get information (...) are able to receive information if they want," VW management board member Hiltrud Werner told EUobserver. Consumer groups disagree.

News in Brief

  1. EU will be exempted from tariffs, says US minister
  2. Malmstroem: EU 'hopes' for US tariffs exemption
  3. Parliament must publish 'trilogue' documents, court says
  4. Italy's centre-right set to share top posts with 5-star movement
  5. Brussels condemns tear gas in Kosovo parliament
  6. Finland pays billionaire €400,000 in EU farm subsidies
  7. 44 leaders sign up for Africa free trade area deal
  8. British 'blue' passports to be made in EU

Stakeholders' Highlights

  1. EUobserverStart a Career in EU Media. Apply Now to Become Our Next Sales Associate
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Latest News

  1. EU summit takes hard look at Russia
  2. Germany casts doubt on Austrian intelligence sharing
  3. EU leaders set for 'stormy debate' on digital tax at summit
  4. EU praises Turkey on migrant deal despite Greek misery
  5. Judicial reforms 'restore balance', Poland tells EU
  6. Whistleblower fears for life as US arrests Malta bank chair
  7. Behind the scenes at Monday's EU talks on Russia
  8. US yet to push on Nord Stream 2 sanctions

Stakeholders' Highlights

  1. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  2. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  3. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework
  4. Mission of China to the EUDigital Cooperation a Priority for China-EU Relations
  5. ECTACompetition must prevail in the quest for telecoms investment
  6. European Friends of ArmeniaTaking Stock of 30 Years of EU Policy on the Nagorno-Karabakh Conflict: How Can the EU Contribute to Peace?
  7. ILGA EuropeCongratulations Finland!
  8. UNICEFCyclone Season Looms Over 720,000 Rohingya Children in Myanmar & Bangladesh
  9. European Gaming & Betting AssociationEU Court: EU Commission Correct to Issue Guidelines for Online Gambling Services
  10. Mission of China to the EUChina Hopes for More Exchanges With Nordic, Baltic Countries
  11. Macedonian Human Rights MovementCondemns Facebook for Actively Promoting Anti-Macedonian Racism
  12. Nordic Council of MinistersGlobal Seed Vault: Gene Banks Gather to Celebrate 1 Million Seed Collections