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April 23, 2021

Euro Area rescue treaty published

The European Commission has published on its website the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, HotNews informs. The document introduces the balanced budget rule and an automatic correction mechanism, talks about the fact that the EC will issue laws for the Euro Area, laws that mainly concern the precise reporting of bond emission plans, the member states’ obligation to file to the Commission their detailed structural reform programmes during the excessive deficit procedure and to coordinate reform plans with the other member states. Likewise, the treaty also stipulates that the golden rule of a balanced budget – a deficit of 3 per cent of GDP and a public debt below 60 per cent of GDP – has to be included in the legislation of member state, preferably in the Constitution, and that member states whose public debt surpasses 60 per cent of GDP have to lower it by an average of 1/20 per year. At the same time, the European Court of Justice will be able to force member states to pay a penalty if they fail to apply an ECJ decision.

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