The Treaty on Stability, Coordination and Governance: should it be incorporated in EU law?

Background

The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG) was formally concluded on 2 March 2012, and entered into force on 1 January 2013. The main provision of this Treaty was the requirement to have a balanced budget rule in domestic legal orders (the Fiscal Compact). Out of the 25 Contracting Parties to the TSCG, 22 are formally bound by the Fiscal Compact (the 19 euro area Member States plus Bulgaria, Denmark and Romania). The Treaty invited the European Commission to report on the measures adopted by these Contracting Parties in that regard (Article 8 TSCG). After extensive exchanges with the Contracting Parties, the Commission presented the conclusions from that analysis in February 2017. Article 16 of the Treaty on Stability, Coordination and Governance (TSCG), 2012, forsaw that ‘Within five years at most following the entry into force of this Treaty…the necessary steps shall be taken…with the aim of incorporating the substance of this Treaty into the legal framework of the European Union.’

As the five-year deadline (1 January 2018) was fast approaching and as both the European Commission and national parliaments were devoting attention to this issue, the authors discussed whether such an incorporation of the TSCG in EU law was appropriate and necessary.

European Commission: Publications: The Fiscal Compact – Taking Stock (February 2017) https://ec.europa.eu/info/publications/fiscal-compact-taking-stock_en

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