Monday

2nd Oct 2023

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.

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

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.

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. European Political Community and key media vote This WEEK
  2. Is the ECB sabotaging Europe's Green Deal?
  3. The realists vs idealists Brussels battle on Ukraine's EU accession
  4. EU women promised new dawn under anti-violence pact
  5. Three steps EU can take to halt Azerbaijan's mafia-style bullying
  6. Punish Belarus too for aiding Putin's Ukraine war
  7. Added-value for Russia diamond ban, as G7 and EU prepare sanctions
  8. EU states to agree on asylum crisis bill, say EU officials

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