Stability and Convergence Programmes: an eye on the economics

The Stability and Growth Pact (SGP) coordinates government fiscal policies. While
it covers the EU as a whole, it is of particular importance for the euro area. The SGP
contains common rules that ensure government debt and deficits are controlled within
specific limits chosen to encourage a stable economic environment that will support
sustainable growth and employment. These rules are necessary because individual
national economic policies can affect the stability and growth potential of the whole
euro area – and thus they are a matter of ‘common concern’. The SGP provides for regular
multilateral surveillance of Member States’ economies to ensure adherence to the rules. The Member States’ Stability and Convergence Programmes form a critical part of this surveillance, specifically by providing a medium-term framework to fiscal policy ensuring that economic stabilisation does not enter into conflict with fiscal discipline.