Saturday

9th Dec 2023

Softer draft of fiscal treaty opens door for UK

  • The Danish EU Presidency is being launched with a series of press events in Copenhagen (Photo: Valentina Pop)

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 intergovernmental treaty on fiscal discipline, to be signed by leaders in March.

The third draft - distributed to EU member states' negotiators on Tuesday (10 January) evening and seen by EUobserver - has softened the obligation to enshrine a "golden rule" on balanced budgets into the constitutions of the 26 member states taking part in the new pact.

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

The move comes after indications that several countries - notably euro-members Ireland and Finland, but also non-euro states wanting to sign up, such as Denmark and Romania - would have to hold referendums in order to change their constitutions.

Instead of asking for the golden rule to be introduced "in national binding provisions of a constitutional or equivalent nature" as in the second draft penned earlier this month, the latest text asks for "provisions of binding force and permanent character, preferably constitutional, that are guaranteed to be respected throughout the national budgetary processes."

The role of the EU commission in taking debt sinners to court for not properly transposing the golden rule into national law, an idea introduced in the second draft at the demand of the European Parliament, has also been watered down to the commission "issuing a report" at the demand of another country adhering to the pact.

The power of taking countries to court is instead to reside with countries - a u-turn going back to the first draft - after French worries the commission risks becoming too powerful.

"If the European Commission, after having given the contracting party concerned the opportunity to submit its observations, confirms non compliance in its report, the matter will be brought to the Court of Justice by the contracting parties," the latest text says, adding that the court ruling shall be binding on the country in question.

Another watering down of earlier drafts rules out introducing new sanctions for countries that break rules on overall public debt, opting instead to limit such penalties to ballooning budget deficits.

Italy, whose debt level is around 120 percent of the gross domestic product, fiercely opposed the original idea.

Another new paragraph leaves open the possibility for the UK to join the pact at a later stage, after Britain in December vetoed an EU Treaty change on the reforms, creating the intergovernmental arrangement at 26-level.

"This treaty shall be open to accession by member states of the European Union other than the contracting parties upon application that any such member state may file," Tuesday's draft says. Other countries are to approve the newcomer "by common agreement."

The 'working group' which is pumping out the texts - a mixed bag of member states' officials led by a Luxemburger - kept another EU parliament demand, to enshrine the intergovernmental pact in EU Treaty law in the next five years.

But it also changed the threshold of countries needed to ratify the pact for it to come into force from 15 to 12. In the first draft, the threshold was even lower, at nine countries.

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.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

Latest News

  1. How Moldova is trying to control tuberculosis
  2. Many problems to solve in Dubai — honesty about them is good
  3. Sudanese fleeing violence find no haven in Egypt or EU
  4. How should EU reform the humanitarian aid system?
  5. EU suggests visa-bans on Israeli settlers, following US example
  6. EU ministers prepare for all-night fiscal debate
  7. Spain's Nadia Calviño backed to be EIB's first female chief
  8. Is there hope for the EU and eurozone?

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Stakeholders' Highlights

  1. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  2. UNOPSFostering health system resilience in fragile and conflict-affected countries
  3. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  4. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  5. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  6. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA

Join EUobserver

Support quality EU news

Join us