The second death of the Stability Pact and the birth of an inter-governmental Europe. CEPS Commentary 28 July 2016

Gros, Daniel. (2016) The second death of the Stability Pact and the birth of an inter-governmental Europe. CEPS Commentary 28 July 2016. [Policy Paper]

Abstract

When the economic governance mechanisms were revised some years ago, it was decided to tighten the rules against excessive deficits, empowering the Commission with the right to propose fines of up to 0.2% of GDP on any Member State that had failed in its obligation to reduce its fiscal deficit and to bring it gradually back down, to below 3% of GDP. Portugal and Spain had clearly not done so last year. Any proposal by the Commission to impose a fine would have been final unless the Finance Ministers were able to muster a 2/3 majority against the proposal.

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