EU members sign 'Fiscal Compact'
2012-03-03 12:46:03
Leaders of twenty-five EU nations on Friday signed the 'fiscal compact' agreement in Brussels, to enforce tougher budget discipline. The U.K. and the Czech Republic refused to sign the deal.
The content of the treaty had been endorsed at the last European Council meeting in January.
The agreement, which is due to take effect on January 1, 2013, includes a requirement for national budgets to be in balance or in surplus. Moreover, the balanced budget rule must be incorporated into the member states' national legal systems.
In the event of deviation from this rule, an automatic correction mechanism will be triggered.
The fiscal compact will be legally binding as an international agreement and will enter into force following ratification by at least 12 euro area member states.