Communication from the Commission – Common principles on national fiscal correction mechanisms

The global economic and financial crises have exposed weaknesses in economic and budgetary governance in the Economic and Monetary Union. Already, a new reform package – the so-called "Six-Pack" – has been adopted and entered into force in December 2011. As the difficult times continue, the extent and potential consequences of the spillovers between euro area Member States' economic and budgetary situations is now clearly evident.

In view of safeguarding the stability of the euro area as a whole, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG), which was signed on 2 March 2012 by twenty-five Member States, includes a fiscal compact (Title III). As part of the fiscal compact, the Contracting Parties shall introduce in their national law rules on a correction mechanism to be triggered automatically in the event of significant observed deviations from the medium-term objective or the adjustment path towards it.

This Communication puts forward common principles underlying the national correction mechanisms. The seven principles are to be found in the Annex. They cover the key issues to be addressed when designing the correction mechanisms, including their legal status, the consistency with the EU framework, the activation of the mechanisms, the nature of the correction in terms of size and timeline, its operational instruments, the working of possible escape clauses, and the role and independence of monitoring institutions.

EUR-Lex: COM(2012)342: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:342:FIN

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