Communication: Making the best use of the flexibility within the existing rules of the Stability and Growth Pact

Author (Corporate)
Series Title
Series Details (2015) 12 final (13.1.15)
Publication Date 13/01/2015
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The Stability and Growth Pact (hereafter “the Pact”) is a cornerstone of the EU's economic governance and of decisive importance for the proper functioning of Economic and Monetary Union. Its objective is to promote sound budgetary policies and to ensure the sustainability of public finances in the Member States. Since its inception in 1997, the Pact has been reformed by the EU legislator in 2005 and in 2011-13 and enriched by experience. In recent years, it has operated as part of a wider and strengthened annual cycle of economic policy coordination, known as the European Semester.

In its 2015 Annual Growth Survey (AGS), the Commission identified investment, structural reforms and fiscal responsibility as key elements of the European Union's economic policy strategy to create jobs and growth. It also presented a new Investment Plan for Europe in support of this strategy. Both this overall economic approach and the concrete elements of the Investment Plan were endorsed by the European Council of 18-19 December 2014.

The Commission also announced that, in order to strengthen the link between investment, structural reforms and fiscal responsibility, it would provide further guidance on the best possible use of the flexibility that is built into the existing rules of the Stability and Growth Pact, without changing these rules. This follows a commitment from the Political Guidelines for the new Commission, as well as previous discussions at the European Council and in the European Parliament.

This interpretative Communication is a contribution to developing a more growth-friendly fiscal stance in the euro area. It is also part of the Commission's efforts to reinforce the effectiveness and understanding of the – sometimes necessarily complex – rules which it is responsible for applying. Transparency and predictability are essential for ownership of the rules by all actors.

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Related Links
EUR-Lex: COM(2015)12: Follow the progress of this communication through the decision-making procedure
ESO: Background information: Stability and Growth Pact: Commission issues guidance to encourage structural reforms and investment

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