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31. 1. 2012 11:48

Czech Government will assess the final text of the new Fiscal Treaty

In the upcoming weeks, the Czech Government will assign preparation of legal analyses of the finalised text of the new treaty and deliberate in detail on the topic.

The new Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, the so-called fiscal compact, was completed yesterday at an informal summit of EU Heads of State or Government in Brussels. Its main target is to contribute to the solution of the current debt crisis in Europe and, in particular, in the euro area, by providing fiscal discipline rules that are to be transposed into national laws.

Before the summit of EU Heads of State or Government in Brussels, on 30 January 2012Czech Prime Minister Petr Nečas said at a press conference, “I could not agree to the treaty at the moment for several reasons. There are some issues concerning the treaty’s content, as well as issues connected with the domestic ratification procedure and the date of entering into force of the treaty, i. e. the adoption of the euro. I therefore consider very important and valuable that the text of the treaty was changed so that it enables later accession at any time.”

One of the more problematic treaty provisions is non euro area Member States’ participation in the Euro Summits, which is, according to the Prime Minister, inadequate in the case of countries which have committed to adopt the euro. “The compromise on broader participation in the Euro Summits is not sufficient for the Czech Republic. I am convinced that as a Member State with the obligation to adopt the common currency, the Czech Republic should be entitled to full observer status at all Euro Summits and not only at some of them,” explained the Prime Minister.

The absence of the debt criterion in the fiscal treaty (Art. 7) is of equal importance for the Czech Republic. We must not forget that the current crisis is to a large extent caused by excessive indebtedness of some Member States.

Since the United Kingdom declined the originally proposed amendments of EU primary law, an alternative solution was found using a separate international agreement outside the EU law.

The treaty is now going to be considered by the Government as well as by the relevant committees of the Czech Parliament. The final decision regarding the treaty can be taken only after detailed analysis is carried out, and after a broad political consensus on the signing and also on the ratification procedure is found.

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