Brussels, 21 December 2012
18019/12
PRESSE 551
Fiscal compact enters into force
The Treaty on Stability, Coordination and Governance in the Economic and Monetary
Union – better known as the "fiscal compact" – will enter into force on 1 January 2013
after ratification by twelve member states of the euro area.
The treaty, which was signed on 2 March 2012 by the leaders of 25 EU member states,
introduces strengthened fiscal discipline and stricter surveillance within the euro area, in
particular by establishing a "balanced budget rule".
It has now been ratified by Austria, Cyprus, Germany, Denmark, Estonia, Spain, France,
Greece, Italy, Ireland, Lithuania, Latvia, Portugal, Romania, Finland and Slovenia. Finland
deposited its instrument of ratification today.
National budgets must be in balance or in surplus under the balanced budget rule, a
criterion that is met if the annual structural government deficit does not exceed 0.5% of
GDP at market prices. They must also be in line with the country-specific medium-term
budgetary objective, as defined in the EU's stability and growth pact.
The balanced budget rule must be incorporated into the member states' national legal
systems, preferably at constitutional level, within one year after the entry into force of the
treaty, i.e. by 1 January 2014.
