Comment: Does the EU need the Stability and Growth Pact?

Abstract: The Stability and Growth Pact was adopted by the Amsterdam European Council in 1997, for the purpose of preventing Member States from incurring excessive budgetary deficits in the euro area. Its implementation during the past five years has revealed how difficult it is for the Member States to comply with its strict requirements. The Stability and Growth Pact has twice been at the centre of a European debate regarding its objectives and inflexibility. The purpose of this article is to examine the provisions of the Pact and consider whether there is need for further co-operation on fiscal policy and what such co-operation may entail.

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