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19. 1. 2012 10:36

The Committee for the European Union approved the Government’s position regarding the draft Fiscal Treaty

Yesterday, 18 January 2012, the Committee for the European Union of the Czech Government approved a framework position regarding the draft international Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (fiscal compact). The position does not anticipate a final decision about signing the treaty, which is left for the Government to decide based on the document’s finalised text. Nevertheless, the position states that the draft fiscal compact significantly changes the mode of execution of powers conferred to the Union and comprises a de facto transfer of additional powers to the EU with effects postponed to the time when the Czech Republic adopts the euro.

In compliance with the Government’s Policy Statement, any fundamental institutional changes in the EU requiring primary law amendments that would transfer competences from the Czech Republic to the EU would require approval by the people in a referendum. Since the effects of the above mentioned treaty on the Czech Republic are postponed until the adoption of the common currency, the referendum need not be connected with the ratification of the EU fiscal compact itself, but it can be held later, at the time of the actual decision when to enter the ERM II mechanism and thus commence the adoption of the euro. In either case a referendum is required by the position and by the Government’s Policy Statement. Several other commitments would also become effective for the Czech Republic at the time of euro area accession, for instance the Treaty establishing the European Stability Mechanism.

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