Fiscal Correction Mechanism (Communication)
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EU Treaties & Institutions

Fiscal Correction Mechanism (Communication)

Dr. Matthias Kullas
Dr. Matthias Kullas

The Fiscal Compact of 2 March 2012 obliges the Contracting Parties to introduce a debt brake into national law. Amongst other things, it provides for a correction mechanism obliging the Contracting Parties directly in case of default. Thus the budgetary discipline of Contracting Parties is to be strengthened. The Commission proposes seven principles which the Contracting Parties should take into in shaping national laws.

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Status

Although the principles that have been developed and the requests addressed to the Contracting Parties are all appropriate to the problem, it is unclear to what extent they are legally binding. The option provided by the Fiscal Compact to set the correction mechanism below constitutional level and thus to relativise it is impeded by the Commission’s specification that it should not be possible to change the mechanism through ordinary budgetary laws.

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Fiscal Correction Mechanism COM(2012) 342 (publ. 03.23.2014) PDF 106 KB Download
Fiscal Correction Mechanism COM(2012) 342