Draft of new EU fiscal compact released

Morlar

This has just gone online :

http://www.rte.ie/news/2011/1216/eudraftagreement.pdf

E.g.

Article 9
Without prejudice to the economic policy coordination as defined in the Treaty on the Functioning of the European Union, the Contracting Parties undertake to work jointly towards an economic policy fostering growth through enhanced convergence and competitiveness and improving the functioning of the Economic and Monetary Union. To this aim, they will take all necessary actions, including through the Euro Plus Pact.
Article 10
While fully respecting the procedural requirements of the Union Treaties, the Contracting Parties undertake to make recourse, whenever appropriate and necessary, to the enhanced cooperation on matters that are essential for the smooth functioning of the euro area, without undermining the internal market.

http://www.rte.ie/news/2011/1216/eurozone.html

European Council President Herman Van Rompuy has circulated a first draft of the new fiscal compact - the international agreement accepted by Eurozone leaders at last week's summit.

The draft says the compact would enter into force if any nine countries ratify it, with other countries joining when they are ready.

British officials earlier said they would take part in "technical discussions" on the new arrangements, despite Prime Minister David Cameron blocking plans a new EU treaty at last week's Brussels summit.

The move was agreed last night in a phone call between Mr Cameron and Mr Van Rompuy.

It is likely to be seen as an olive branch to the 26 other EU member states and to Mr Cameron's Liberal Democrat coalition partners.

A Downing St spokesman said Mr Cameron wants the new fiscal agreement to succeed and find the right way forward that ensures the EU institutions fulfil their role as guardian of the EU treaty.

However, it is unclear what status Britain will enjoy in the talks.

Britain said it had not received adequate safeguards for its financial services industry at the summit.

Meanwhile, the head of the International Monetary Fund has warned that Europe's debt crisis will not be solved by Europe alone.

Speaking in Washington last night, Christine Lagarde called on all countries to work together to avoid a 1930s-style depression.

Ms Lagarde said the current crisis was not one that will be resolved by one group of countries taking action.

Fitch reviewing credit ratings of six countries

Fitch Ratings said this evening that it was reviewing the credit ratings of six eurozone countries, including Spain and Italy, warning that their credit scores could be downgraded.

Placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus on Ratings Watch Negative "indicates that the above ratings are under active review and are subject to a heightened probability of downgrade in the near-term," said Fitch.

Does this clarify the need for a refferendum in Ireland ?

From a quick read through it appears unclear to me at this point.

This part here -

the Contracting Parties undertake to work jointly towards an economic
policy fostering growth through enhanced convergence and competitiveness and improving the functioning of the Economic and Monetary Union. To this aim, they will take all necessary actions, including through the Euro Plus Pact.

could amount to just about anything depending on who is in charge of interpreting it.

Morlar

Blah

Clickable link

http://www.rte.ie/news/2011/1216/eudraftagreement.pdf

( For mobile users )
DRAFT
INTERNATIONAL AGREEMENT ON A REINFORCED ECONOMIC UNION
THE CONTRACTING PARTIES………..
CONSCIOUS of the obligation of the Contracting Parties, as Member States of the European
Union, to regard their economic policies as a matter of common concern,
DESIRING to promote conditions for stronger economic growth in the European Union and, to that
end, to develop ever-closer coordination of economic policies within the euro area,
BEARING IN MIND that the coordination of the economic policies of the Contracting Parties, as
Member States of the European Union, is based on the objective of sound and sustainable
government finances as a means of strengthening the conditions for price stability and for strong
sustainable growth underpinned by financial stability, thereby supporting the achievement of the
Union's objectives for sustainable growth and employment,
BEARING IN MIND that the need for governments to prevent a government deficit becoming
excessive is of an essential importance to safeguard the stability of the euro area as a whole, and
accordingly requires the introduction of specific rules to address this need, including the need to
take necessary corrective action,
CONSCIOUS of the need to ensure that their deficits remain below 3 % of their gross domestic
product at market prices and that government debt is below, or sufficiently declining towards, 60 %
of their gross domestic product at market prices,
RECALLING that the Contracting Parties, as Member States of the European Union, should refrain
from adopting any measure which could jeopardise the attainment of the Union's objectives in the
framework of the economic union, notably the practice of accumulating debt outside the general
government accounts,
BEARING IN MIND that the Heads of State or Government of the euro area Member States agreed
on 9 December 2011 on a reinforced architecture for Economic and Monetary Union, building upon
the European Treaties and facilitating the implementation of measures taken on the basis of Articles
121, 126 and 136 of the Treaty on the Functioning of the European Union,
2
BEARING IN MIND that the objective of the Heads of State or Government of the euro area
Member States and of other Member States of the European Union remains to incorporate the
provisions of this Agreement as soon as possible into the Treaties on which the European Union is
founded,
TAKING NOTE, in this context, of the intention of the European Commission to present further
legislative proposals within the framework of the Union Treaties regarding a mechanism of ex ante
reporting of debt issuance plans of the Member States of the European Union, a procedure of
economic partnership programmes detailing structural reforms for euro area Member States in
excessive deficit procedure as well as a new coordination procedure at the level of the euro area for
major economic policy reform plans,
TAKING NOTE that, when reviewing and monitoring the budgetary commitments under this
Agreement, the European Commission will act within the framework of its powers as provided by
the Treaty on the functioning of the European Union, in particular Articles 121, 126 and 136
thereof,
NOTING in particular that, for the application of the budgetary "Balanced Budget Rule" described
in Article 3 of this Agreement, this monitoring will be made through the setting up of country
specific reference values and of calendars of convergence, as appropriate, for each Contracting
Party,
NOTING that compliance with the obligation to transpose the "Balanced Budget Rule" into national
legal systems at constitutional or equivalent level should be subject to the jurisdiction of the Court
of Justice of the European Union, in accordance with Article 273 of the Treaty on the Functioning
of the European Union,
RECALLING the need to facilitate the adoption of measures under the excessive deficit procedure
of the European Union for euro area Contracting Parties whose planned or actual government
deficit to gross domestic product exceeds 3%, whilst strongly reinforcing the objective of that
procedure, namely to encourage and, if necessary, compel the Member State concerned to reduce a
deficit which might be identified,
RECALLING the need for those Contracting Parties whose government debt exceeds the 60 %
reference value to reduce it at an average rate of one twentieth per year as a benchmark,
RECALLING the agreement of the Heads of State or Government of the euro area Member States
on 26 October 2011 to improve the governance of the euro area, including the holding of at least
two Euro Summit meetings per year, as well as the endorsement of the Euro Plus Pact by the Heads
of State or Government of the euro area Member States and of other Member States of the
European Union on 25 March 2011,
3
STRESSING the importance of the Treaty establishing the European Stability Mechanism as an
element of a global strategy to strengthen the Economic and Monetary Union,
HAVE AGREED UPON the following provisions,
TITLE I
PURPOSE AND SCOPE
Article 1
1. By this Agreement, the Contracting Parties, which are Member States of the European
Union, agree to strengthen their budgetary discipline and to reinforce their economic policy
coordination and governance.
2. The provisions of this Agreement shall apply to the Contracting Parties whose currency is
the euro. They may also apply to the other Contracting Parties, under the conditions set out in
Article 14.
TITLE II
CONSISTENCY AND RELATIONSHIP WITH THE LAW OF THE UNION
Article 2
1. This Agreement shall be applied by the Contracting Parties in conformity with the Treaties
on which the European Union is founded, in particular Article 4(3) of the Treaty on European
Union, and with European Union law.
2. The provisions of this Agreement shall apply insofar as they are compatible with the
Treaties on which the Union is founded and with European Union law. They shall not encroach
upon the competences of the Union to act in the area of the economic union. In accordance with the
case law of the Court of Justice of the European Union, European Union law has precedence over
the provisions of this Agreement.
4
TITLE III
BUDGETARY DISCIPLINE
Article 3
1. The Contracting Parties shall apply the following rules, in addition to and without prejudice
to the obligations derived from Union Law:
a) Revenues and expenditures of the general government budgets shall be balanced or in
surplus. The Contracting Parties may temporarily incur deficits only to take into account the
budgetary impact of the economic cycle and, beyond such impact, in case of exceptional
economic circumstances, or in periods of a severe economic downturn, provided that this
does not endanger budgetary sustainability in medium term.
b) The rule under point a) above shall be deemed to be respected if the annual structural deficit
of the general government does not exceed a country-specific reference value, which ensures
an adequate safety margin with respect to the 3 % reference value mentioned under Article 1
of the Protocol (No 12) on the excessive deficit procedure annexed to the Treaty on
European Union and to the TFEU (hereinafter 'Protocol No 12') as well as rapid progress
towards sustainability, also taking into account the budgetary impact of ageing. The
Contracting Parties shall ensure convergence towards their respective country-specific
reference value. As a rule, the country specific reference value shall not exceed 0.5 % of
nominal GDP.
c) Where the debt level is significantly below the 60 % reference value mentioned under
Article 1 of Protocol No 12, the country-specific reference value for the annual structural net
deficit may take a higher value than specified under point b).
2. The rules mentioned under paragraph 1 shall be introduced in national binding provisions of
a constitutional or equivalent nature. The Contracting Parties shall in particular put in place a
correction mechanism to be triggered automatically in the event of significant deviations from the
reference value or the adjustment path towards it. This mechanism shall be defined at national level,
on the basis of commonly agreed principles. It shall include the obligation of the Contracting Parties
to present a programme to correct the deviations over a defined period of time. It shall fully respect
responsibilities of national Parliaments.
3. For the purposes of this Article, definitions set out in Article 2 of Protocol No 12 shall
apply. In addition, the following definitions shall apply:
- "annual structural deficit of the general government" means the annual cyclically-adjusted
deficit net of one-off and temporary measures;
- "exceptional economic circumstances" means an unusual event outside the control of the
Contracting Party concerned, which has a major impact on the financial position of the
government.
5
Article 4
When the ratio of their government debt to gross domestic product exceeds the 60 % reference
value mentioned under Article 1 of Protocol No 12, the Contracting Parties undertake to reduce it at
an average rate of one twentieth per year as a benchmark.
Article 5
The Contracting Parties that are subject to an excessive deficit procedure under the Union Treaties
shall put in place a budgetary and economic partnership programme with binding value including a
detailed description of the structural reforms necessary to ensure an effectively durable correction
of their excessive deficits. Such programmes shall be submitted to the European Commission and
the Council.
Article 6
The Contracting Parties shall improve the reporting of their national debt issuance. For that purpose,
they shall report ex-ante on their national debt issuance plans to the European Commission and the
Council.
Article 7
While fully respecting the procedural requirements of the Union Treaties, the Contracting Parties
whose currency is the euro undertake to support proposals or recommendations put forward by the
European Commission where a Member State whose currency is the euro is recognised by the
European Commission to be in breach of the 3 % ceiling in the framework of an excessive deficit
procedure, unless a qualified majority of them is of another view. A qualified majority shall be
defined by analogy with Article 238(3)(a) TFEU and with Article 3 of Protocol N° 36 to the EU
Treaties on transitional provisions and without taking into account the position of the Contracting
Party concerned.
Article 8
Any Contracting Party which considers that another Contracting Party has failed to comply with
Article 3(2) may bring the matter before the Court of Justice of the European Union. The judgment
of the Court of Justice of the European Union shall be binding on the parties in the procedure,
which shall take the necessary measures to comply with the judgment within a period to be decided
by said Court. The implementation of the rules put in place by the Contracting Parties to comply
with Article 3(2) will be subject to the review of the national Courts of the Contracting Parties.
6
TITLE IV
ECONOMIC CONVERGENCE
Article 9
Without prejudice to the economic policy coordination as defined in the Treaty on the Functioning
of the European Union, the Contracting Parties undertake to work jointly towards an economic
policy fostering growth through enhanced convergence and competitiveness and improving the
functioning of the Economic and Monetary Union. To this aim, they will take all necessary actions,
including through the Euro Plus Pact.
Article 10
While fully respecting the procedural requirements of the Union Treaties, the Contracting Parties
undertake to make recourse, whenever appropriate and necessary, to the enhanced cooperation on
matters that are essential for the smooth functioning of the euro area, without undermining the
internal market.
Article 11
With a view to benchmarking best practices, the Contracting Parties ensure that all major economic
policy reforms that they plan to undertake will be discussed and coordinated among themselves.
This coordination shall involve the institutions of the European Union as required by the law of the
Union.
Article 12
Representatives of the Committees in charge of economy and finance within the Parliaments of the
Contracting Parties will be invited to meet regularly to discuss in particular the conduct of
economic and budgetary policies, in close association with representatives of the relevant
Committee of the European Parliament.
7
TITLE V
EURO SUMMIT MEETINGS
Article 13
1. The Heads of State or Government of the Contracting Parties whose currency is the euro,
(hereinafter "the euro area Heads of State or Government") and the president of the European
Commission shall meet informally in Euro Summit meetings. The President of the European
Central Bank shall be invited to take part in such meetings. The President of the Euro Summit shall
be appointed by the euro area Heads of State or Government by simple majority at the same time
the European Council elects its President and for the same term of office.
2. Euro Summit meetings shall take place, when necessary, and at least twice a year, to discuss
questions related to the specific responsibilities those Member States share with regard to the single
currency, other issues concerning the governance of the euro area and the rules that apply to it, and
in particular strategic orientations for the conduct of economic policies and for improved
competitiveness and increased convergence in the euro area.
3. Euro Summit meetings shall be prepared by the President of the Euro Summit, in close
cooperation with the President of the European Commission, and by the Euro Group. The follow-up
to the meetings shall be ensured in the same manner.
4. The President of the Euro Summit shall keep the other Member States of the European
Union closely informed of the preparation and outcome of the Euro Summit meetings. The
President will also inform the European Parliament of the outcome of the Euro Summit meetings.
TITLE VI
GENERAL AND FINAL PROVISIONS
Article 14
1. This Agreement shall be ratified by the Contracting Parties in accordance with their
respective constitutional requirements. The instruments of ratification shall be deposited with the
General Secretariat of the Council of the European Union.
8
2. This Agreement shall enter into force on the first day of the month following the deposit of
the ninth instrument of ratification by a Contracting Party whose currency is the euro.
3. This Agreement shall apply as from the day of entry into force amongst the Contracting
Parties whose currency is the euro and which have ratified it. It shall apply to the other Contracting
Parties whose currency is the euro as from the first day of the month following the deposit of their
respective instrument of ratification.
4. By derogation to Paragraph 3, Title V of this Agreement shall apply to all Contracting
Parties whose currency is the euro as from the date of the entry into force of the Agreement.
5. This Agreement shall apply to the Contracting Parties with a derogation as defined in
Article 139(1) of the Treaty on the Functioning of the European Union, or with an exemption as
defined in Protocol No 16 on certain provisions related to Denmark annexed to the Union Treaties,
which have ratified it, as from the day when the decision abrogating that derogation or exemption
takes effect, unless the Contracting Party concerned declares its intention to be bound at an earlier
date by all or part of the provisions in Titles III and IV of this Agreement.
__________

Saila

dont you just hate that 'lawyer speak' these kind of things have

ThePower11

Bluh?

Where To

I refuse to read anything I do not understand.

Saila

ThePower11 wrote: »

Bluh?

good point, I agree :cool:

ChunkyLover_53

I'd let Christine Lagarde sexually harass me in a New York hotel room.

Durty.

MungBean

Someone read all that and give us the shortened version. I'm afraid my head will explode if I try to read it.

Saila

MungBean wrote: »

Someone read all that and give us the shortened version. I'm afraid my head will explode if I try to read it.

just pick up an insurance policy and read that, it'll be pretty much the same nonsense of arse covering of layers on layers. :rolleyes:

Biggins

Draft EU deal could commit Ireland to austerity for a decade

THE EUROPEAN COUNCIL has issued the first draft of the deal struck by 26 of the 27 European Union member states last week – which outlines provisions which could tie Ireland to more years of severe austerity Budgets.

The draft deal – which outlines the terms under which eurozone members will form a ‘reinforced economic union’ – would require countries with their general government to take radical measures chipping away at their huge debt.

Countries with a debt-to-GDP ratio of over 60 per cent would agreed to reduce their debt by 5 per cent each year – a clause which would force Ireland, with a debt-to-GDP ratio of around 90 per cent, to take billions more out of each Budget for the medium-term future.
Ireland’s gross government debt, at the end of November, stood at €144 billion – but with GDP of around €160 billion, Ireland would have to reduce its debt by at least €7 billion each year until the debt falls back to around €100 billion.

This would be expected to rise even further in the coming years, as Ireland’s government debt as the liabilities from the banking bailout begin to materialise.

Sinn Féin finance spokesman Pearse Doherty lambasted the clause, describing it as “completely unworkable”.
“It would just mean huge austerity that would just cripple the economy,” he told TheJournal.ie this evening. “The deal is flawed in that it doesn’t allow for a debt write-down.”

The draft edition of the deal – officially styled as an ‘international agreement’ – clears the way for the government to begin its examination of whether the deal will require a constitutional referendum.
The terms of the deal reinforce the demand that the measures be adopted “at constitutional or equivalent level”, but are not intended to encroach on the powers that the EU already has – a combination of clauses which may allow Ireland to sign up without the need for a public vote.


Debt brake

Drafted with input from all 27 EU member states - including the UK, even though David Cameron refused to sign up to the deal last week – the proposals also formally outline the limits of budget deficits that members will be allowed to adopt.

Member states will only be allowed to incur deficits beyond 0.5 per cent of GDP “to take into account the budgetary impact of the economic cycle”, or, in exceptional circumstances, “in case of exceptional economic circumstances”.

Countries may be permitted to raise these levels, but only where their government’s debt is less than 60 per cent of their GDP – that is, the total value of their economic output.
Countries are required to introduce those limits in “a constitutional or equivalent nature”, with an automatic ‘correction mechanism’ – which each country can define itself – kicking in whenever those limits are breached. Ireland has already committed to introducing such a law in early 2012.

Countries also agree to support whatever measures the European Commission recommends for eurozone countries breaching the 3 per cent rule – though this can be overturned by a ‘qualified majority’ of eurozone members.

Elsewhere, the deal sees countries agree to “take all necessary actions” towards “enhanced convergence and competitiveness” for the eurozone as a whole, and to discuss “all major economic policy reforms” with each other before introduction.
Members are required to take whatever steps are needed to guarantee “the smooth functioning of the euro area, without undermining the internal market” – a clause which could potentially heap new pressure on Ireland’s 12.5 per cent rate of corporation tax.

The eight-page document’s lengthy preamble includes the assertion that participating countries want to “incorporate the provisions of this Agreement as soon as possible into the Treaties”.
This cannot happen, however, unless the UK withdraws its current veto over any amendments to the EU’s treaties.

http://www.thejournal.ie/draft-eu-deal-could-commit-ireland-to-austerity-for-a-decade-306523-Dec2011/

I fear it gives Germany and especially France, further ability to bully Ireland!

Son Of A Vidic

Morlar wrote: »

could amount to just about anything depending on who is in charge of interpreting it.

Which is precisely what they want, a smokescreen.

Biggins

Good comment on the Journal.ie link above - which I have to agree with:

...What I have a problem with is THIS particular Europe which seems to be turning into a Dictatorship run by Goldman Sacks trying to turn us all into a homogenized brand and neglecting what makes Europe so special- our regional differences and small producers. If we are going to have a Europe, it has to be based on the right principles. Bankers greed is not a founding principle for a new state!!

hmmm

How about reading the thing and taking in the views of a few other people who have read the thing without jumping to conclusions?

mongoman

hmmm wrote: »

How about reading the thing and taking in the views of a few other people who have read the thing without jumping to conclusions?

How about not assuming people haven't read it.