Saturday

30th Sep 2023

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.

Opinion

How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Latest News

  1. EU women promised new dawn under anti-violence pact
  2. Three steps EU can take to halt Azerbaijan's mafia-style bullying
  3. Punish Belarus too for aiding Putin's Ukraine war
  4. Added-value for Russia diamond ban, as G7 and EU prepare sanctions
  5. EU states to agree on asylum crisis bill, say EU officials
  6. Poland's culture of fear after three years of abortion 'ban'
  7. Time for a reset: EU regional funding needs overhauling
  8. Germany tightens police checks on Czech and Polish border

Stakeholders' Highlights

  1. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  2. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  6. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch

Stakeholders' Highlights

  1. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations
  2. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  3. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  4. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  5. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  6. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics

Join EUobserver

Support quality EU news

Join us