The EU adopted a new fiscal pact

31.01.2012 On Monday 30 January 2012 within the framework of the latest emergency summit in Brussels the European Union member states signed a new fiscal pact. The global aim of this document adoption is to stabilize the financial situation in the EU. However, only 25 of 27 member states have expressed their consent to sign this financial pact. Britain and the Czech Republic refused to join this agreement because of a weak regulation of urgent issues on unemployment and investments in the document.

The new pact includes a number of financial penalties for member states whose budget deficit exceeds 3% of annual GDP. By the time of this normative act entry into force (which is scheduled on 1 January 2013) ratification of least 12 EU countries is needed.

Expert’s opinion

“It seems that the signing of a new fiscal pact by EU member states should have a beneficial effect on the subsequent conduct of economic policy in these countries. To the opinion of the European Central Bank the document represents a first step in a financial union creation - this project is actively discussed by the EU states.

It is unknown what exact financial mechanisms will be applied to countries whose budget deficit exceeds 3% of GDP. However, the imposition of sanctions is the most effective incentive to achieve financial stability within the EU”.

On the basis: www.ria.ru

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest&Bright)