Key Benefits:
President of the Republic,
On the report of the Prime Minister and the Minister for Foreign Affairs,
Considering the Constitution, in particular articles 52 to 55;
Vu la Act No. 2012-1171 of 22 October 2012 authorizing the ratification of the Treaty on Stability, Coordination and Governance within the Economic and Monetary Union;
Vu le Decree No. 53-192 of 14 March 1953 amended on the ratification and publication of international commitments undertaken by France,
Decrete:
The Treaty on Stability, Coordination and Governance within the Economic and Monetary Union between the Kingdom of Belgium, the Republic of Bulgaria, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Republic of Italy, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Great Duchy of Luxembourg, Hungary
The Prime Minister and the Minister for Foreign Affairs are responsible for the execution of this Order, which will be published in the Official Journal of the French Republic.
T R A I T E
REPUBLIC, THE REPUBLIC OF GERMANY,
The Kingdom of Belgium, the Republic of Bulgaria, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Republic of Italy, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, Hungary, Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland,
hereafter referred to as the "contracting parties",
Aware of their obligation, as member states of the European Union, to consider their economic policies as a matter of common interest;
DEIREUSES to promote the conditions for stronger economic growth in the European Union and, to that end, to develop an ever-increasing coordination of economic policies within the euro zone;
RECORD OF THE FACT that the need for governments to maintain sound and sustainable public finances and to prevent excessive public deficit is of vital importance to preserve the stability of the euro area as a whole, and therefore requires the introduction of specific rules, including a budgetary balance rule and an automatic mechanism for the adoption of corrective measures;
Acknowledges the need to ensure that their public deficit does not exceed 3 per cent of their gross domestic product at market prices and that their public debt does not exceed 60 per cent of their gross domestic product at market prices or decreases at a satisfactory rate to get closer to this reference value;
RECALLING that the contracting parties, as member states of the European Union, must refrain from any measures that could jeopardize the achievement of the objectives of the Union as part of the economic union, including the accumulation of debt outside the accounts of public administrations;
RECORD OF THE FACT that the Heads of State or Government of the Member States of the euro zone agreed on 9 December 2011 on a strengthened architecture for the Economic and Monetary Union, based on the treaties on which the European Union is founded and aimed at facilitating the implementation of the measures adopted on the basis of articles 121, 126 and 136 of the Treaty on the Functioning of the European Union;
RECORD OF THE FACT only the objective of the Heads of State or Government of the Member States of the euro zone and other Member States of the European Union is to integrate the provisions of this Treaty as soon as possible in the treaties on which the European Union is founded;
REQUESTS the legislative proposals made, on 23 November 2011, by the European Commission for the euro zone in the framework of the treaties on which the European Union is founded, on the strengthening of the economic and budgetary surveillance of the Member States knowing or risking to know serious difficulties from the point of view of their financial stability and on common provisions for the monitoring and evaluation of the draft budgetary plans and for the correction of the excessive deficits of the Member States
EXPERIENCE that they are prepared to support the proposals that the European Commission could present in order to further strengthen the pact of stability and growth by introducing, for the Member States whose currency is the euro, a new margin for the establishment of medium-term objectives, in accordance with the limits established in this Treaty;
NOTING that, for the review and monitoring of budgetary commitments under this Treaty, the European Commission will act within the framework of the powers conferred upon it by the Treaty on the Functioning of the European Union, in particular Articles 121, 126 and 136;
NOTING in particular that, with respect to the application of the "budget balance rule" set out in Article 3 of this Treaty, this follow-up will be achieved through the establishment, for each contracting party, of country-specific medium-term objectives and convergence schedules, where applicable;
NOTING that the medium-term objectives should be updated periodically on the basis of a mutually agreed approach, the main parameters of which must also be revised regularly taking into account the risks posed by explicit and implicit liabilities on public finances, as set out in the objectives of the Stability and Growth Pact;
NOTING that, in order to determine whether sufficient progress has been made to achieve the medium-term objectives, a comprehensive assessment should be carried out with reference to the structural balance and including an analysis of expenditures, deducting discretionary revenue measures, in accordance with the provisions of the law of the European Union and, in particular, to Council Regulation (EC) No 1466/97 of 7 July 1997 on strengthening the monitoring of budgetary positions as well as
NOTING that the correction mechanism to be established by the contracting parties should aim at correcting deviations from the medium-term objective or adjustment path, including their cumulative effects on the dynamics of public debt;
NOTING that compliance with the obligation of the contracting parties to transpose the "budget balance rule" into their national legal systems through binding, permanent and preferably constitutional provisions should fall within the jurisdiction of the Court of Justice of the European Union, in accordance with Article 273 of the Treaty on the Functioning of the European Union;
RECALLING that Article 260 of the Treaty on the Functioning of the European Union empowers the Court of Justice of the European Union to impose on a Member State of the European Union that has not complied with any of its judgments the payment of a lump sum or an infringement and RECALLING that the European Commission has set criteria to determine the payment of the lump sum
RECALLING the need to facilitate the adoption of measures within the framework of the European Union procedure concerning excessive deficits in respect of Member States whose currency is the euro and whose relationship between the planned or actual public deficit and the gross domestic product exceeds 3%, while substantially strengthening the objective of this procedure, which is to induce and, if necessary, to force the Member State concerned to reduce the deficit
RECALLING the requirement, for contracting parties whose public debt exceeds the benchmark value of 60%, to reduce it at an average rate of one twentieth per year, as a reference;
REQUESTS the need to respect, in the implementation of this Treaty, the specific role of social partners, as recognized in the law or national systems of each Contracting Party;
SOULIZING that no provision of this Treaty shall be construed as amending in any way the economic policy conditions to which financial assistance has been granted to a contracting party within the framework of a stabilization programme in which the European Union, its Member States or the International Monetary Fund participates;
NOTING that the proper functioning of the Economic and Monetary Union requires the contracting parties to work together on an economic policy by which, on the basis of the mechanisms for the coordination of economic policies defined in the treaties on which the European Union is founded, they undertake the actions and adopt the necessary measures in all areas essential to the proper functioning of the euro zone;
NOTING, in particular, the willingness of the contracting parties to make more active use of enhanced cooperation, as provided for in Article 20 of the Treaty on the European Union and Articles 326 to 334 of the Treaty on the functioning of the European Union, without prejudice to the domestic market, and their willingness to resort fully to the measures concerning the Member States whose currency is the euro, in accordance with Article 136 of the Treaty on the functioning of the European Union as well as
RECALLING the agreement of the Heads of State or Government of the Member States of the Euro Area on 26 October 2011 to improve the governance of the Euro Area, including by holding at least two summits of the Euro Area per year, which must be convened, except in exceptional circumstances, immediately after the meetings of the European Council or the meetings of the Contracting Parties that have ratified this Treaty;
RECALLING also the adoption by the Heads of State or Government of the Member States of the euro zone and other Member States of the European Union, on 25 March 2011, of the euro plus pact, which identifies the issues essential to the promotion of competitiveness in the euro zone;
Acknowledging the importance of the Treaty establishing the European Stability Mechanism as an element of a comprehensive strategy to strengthen the Economic and Monetary Union, and REMARKING that the granting of financial assistance in the context of the new programmes under the European Stability Mechanism will, as of 1 March 2013, be conditioned upon the ratification of the present Treaty by the Contracting Party concerned and, as soon as the deadline is reached,
NOTING that the Kingdom of Belgium, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Grand Duchy of Luxembourg, Malta, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Slovenia, the Slovak Republic and the Republic of Finland are Contracting Parties whose currency is the euro
NOTING that the Republic of Bulgaria, the Kingdom of Denmark, the Republic of Latvia, the Republic of Lithuania, Hungary, the Republic of Poland, Romania and the Kingdom of Sweden are Contracting Parties which, as Member States of the European Union, are subject to an exemption to the participation in the single currency on the date of signature of this Treaty, and that they may only be bound, as long as it is not
CONVENUES OF SUVISIONS:
Article 1
1. By this Treaty, the contracting parties agree, as member states of the European Union, to strengthen the economic pillar of the Economic and Monetary Union by adopting a set of rules to promote fiscal discipline through a fiscal compact, to strengthen the coordination of their economic policies and to improve the governance of the euro zone, thereby supporting the achievement of the objectives of the European Union in terms of sustainable growth, employment, competitiveness and social cohesion.
2. This Treaty applies fully to Contracting Parties whose currency is the euro. It also applies to other Contracting Parties, to the extent and under the conditions provided for in Article 14.
Article 2
1. This Treaty shall be applied and interpreted by the contracting parties in accordance with the treaties on which the European Union is founded, and in particular Article 4, paragraph 3, of the Treaty on the European Union, as well as the law of the European Union, including procedural law when it is necessary to adopt acts of derivative law.
2. This Treaty applies to the extent that it is consistent with the treaties on which the European Union is founded and with the law of the European Union. It does not affect the competence conferred on the Union to act in the field of economic union.
Article 3
1. In addition to their obligations under European Union law and without prejudice to them, the Contracting Parties shall apply the rules set out in this paragraph:
(a) The budgetary situation of public administrations of a contracting party is in balance or surplus;
(b) The rule in point (a) is considered to be respected if the annual structural balance of public administrations corresponds to the specific medium-term objective of each country, as defined in the revised Stability and Growth Pact, with a structural deficit of 0.5% of the gross domestic product at market prices. The contracting parties shall ensure rapid convergence towards their respective medium-term objective. The timetable for this convergence will be proposed by the European Commission, taking into account the risks to the sustainability of public finances in each country. Progress towards the medium-term objective and compliance with this objective are the subject of a comprehensive assessment that refers to the structural balance and includes an analysis of expenditures, deducting discretionary revenue measures, in accordance with the revised Stability and Growth Pact;
(c) The contracting parties may not temporarily deviate from their medium-term objective or from the adjustment trajectory to allow its realization only in the event of exceptional circumstances, as defined in paragraph 3, point (b);
(d) When the relationship between public debt and gross domestic product at market prices is significantly less than 60% and when the risks to long-term fiscal sustainability are low, the lower limit of the medium-term objective as defined in point (b) may be noted to achieve a structural deficit of not more than 1.0% of gross domestic product at market prices;
(e) A correction mechanism is automatically triggered if significant deviations are found in relation to the medium-term objective or the adjustment trajectory to allow its realization. This mechanism entails the obligation of the Contracting Party concerned to implement measures to correct these deviations over a specified period.
2. The rules set out in paragraph 1 shall take effect in the national law of the Contracting Parties no later than one year after the entry into force of this Treaty, by means of binding and permanent provisions, preferably constitutional, or whose full respect and strict observance throughout the national budgetary processes are otherwise guaranteed. The Contracting Parties shall establish, at the national level, the correction mechanism referred to in paragraph 1 (e), on the basis of common principles proposed by the European Commission and in particular concerning the nature, scope and timing of corrective measures to be implemented, including in exceptional circumstances, as well as the role and independence of the institutions responsible, at the national level, for verifying compliance with the rules set out in paragraph 1. This correction mechanism fully respects the prerogatives of national parliaments.
3. For the purposes of this article, the definitions set out in Article 2 of the Protocol (No. 12) on the procedure for excessive deficits annexed to the treaties of the European Union are applicable.
The following definitions are also applicable for the purposes of this article:
(a) The "annual structural balance of public administrations" means the adjusted annual balance of economic changes, deducting from ad hoc and temporary measures;
(b) The "exceptional circumstances" refer to unusual facts independent of the will of the contracting party concerned and having significant effects on the financial situation of public administrations or to periods of severe economic recession as referred to in the revised stability and growth pact, provided that the temporary deviation of the contracting party concerned does not jeopardize its medium-term fiscal sustainability.
Article 4
When the relationship between the public debt and the gross domestic product of a Contracting Party is greater than the reference value of 60% referred to in Article 1 of the Protocol (No. 12) on the procedure for excessive deficits, annexed to the treaties of the European Union, the said Contracting Party shall reduce it to an average rate of one twentieth per year, as a reference, as provided in Article 2 of the Regulation (EC) No. The existence of an excessive deficit due to non-compliance with the debt criterion will be decided in accordance with the procedure provided for in Article 126 of the Treaty on the Functioning of the European Union.
Article 5
1. A contracting party that is the subject of a procedure for excessive deficits, under the treaties on which the European Union is founded, is implementing a budget and economic partnership programme with a detailed description of the structural reforms to be prepared and implemented to ensure an effective and sustainable correction of its excessive deficit. The content and form of these programmes are defined in European Union law. Their presentation for approval to the Council of the European Union and the European Commission and their follow-up will take place within the framework of existing monitoring procedures under the Stability and Growth Pact.
2. The implementation of the budget and economic partnership programme and the associated annual budget plans will be monitored by the Council of the European Union and the European Commission.
Article 6
In order to better coordinate the planning of their national debt emissions, the contracting parties give the Council of the European Union and the European Commission guidance on their plans for public debt emissions.
Article 7
In full compliance with the procedural requirements established by the treaties on which the European Union is founded, the contracting parties whose currency is the euro undertake to support the proposals or recommendations submitted by the European Commission when the European Commission considers that a Member State of the European Union whose currency is the euro does not respect the criterion of the deficit within the framework of a procedure concerning excessive deficits. This obligation does not apply when it is established that among the contracting parties whose currency is the euro, a qualified majority, calculated by analogy with the relevant provisions of the treaties on which the European Union is founded without taking into account the position of the contracting party concerned, is opposed to the proposed or recommended decision.
Article 8
1. The European Commission is invited to submit in due course to the Contracting Parties a report on the provisions adopted by each of them in accordance with Article 3, paragraph 2. If, after giving the Contracting Party concerned the opportunity to present its observations, the European Commission concludes in its report that the Contracting Party did not comply with Article 3, paragraph 2, the Court of Justice of the European Union shall have before it the matter by one or more contracting parties. Where a contracting party considers, regardless of the Commission's report, that another contracting party has failed to comply with Article 3, paragraph 2, it may also refer to the Court of Justice of that matter. In both cases, the judgment of the Court of Justice is binding on the parties to the proceedings, which take the necessary steps to comply with the judgment within a time limit to be determined by the Court of Justice.
2. Where, on the basis of its own assessment or that of the European Commission, a contracting party considers that another contracting party has not taken the necessary steps to comply with the Court of Justice decision referred to in paragraph 1, it may refer to the Court of Justice of the case and request that financial sanctions be imposed on the basis of the criteria established by the European Commission under Article 260 of the Treaty on the Functioning of the European Union. If the Court of Justice concludes that the Contracting Party concerned has not complied with its decision, it may charge it with the payment of a lump sum or an offence appropriate to the circumstances and not exceeding 0.1% of its gross domestic product. Payments to a contracting party whose currency is the euro are to be paid to the European stability mechanism. In other cases, payments are made to the European Union's general budget.
3. This Article constitutes a compromise between the Contracting Parties within the meaning of Article 273 of the Treaty on the Functioning of the European Union.
Article 9
On the basis of the coordination of economic policies defined in the Treaty on the Functioning of the European Union, the contracting parties undertake to work jointly with an economic policy that promotes the smooth functioning of the Economic and Monetary Union and promotes economic growth through the strengthening of convergence and competitiveness. To this end, the contracting parties undertake the necessary actions and take the necessary measures in all areas essential to the proper functioning of the euro zone, with a view to achieving the objectives of enhancing competitiveness, promoting employment, enhancing the sustainability of public finances and enhancing financial stability.
Article 10
In accordance with the requirements established by the treaties on which the European Union is founded, the contracting parties are ready to actively resort, whenever indicated and necessary, to measures concerning the Member States whose currency is the euro, as provided for in Article 136 of the Treaty on the functioning of the European Union, as well as to enhanced cooperation, as provided for in Article 20 of the Treaty on the European Union and Articles 326 to 334
Article 11
In order to assess the best practices and to work towards an economic policy based on closer coordination, the contracting parties ensure that all major economic policy reforms that they plan to undertake are discussed beforehand and, if necessary, coordinated among them. This coordination involves the institutions of the European Union as soon as European Union law requires it.
Article 12
1. The Heads of State or Government of the Contracting Parties whose currency is the euro meet informally at summits in the euro zone in which the President of the European Commission also participates.
The President of the European Central Bank is invited to attend these meetings. The president of the summit of the euro zone is appointed by a simple majority by the heads of state or government of the contracting parties whose currency is the euro during the election of the President of the European Council and for an identical term of office.
2. Summits in the euro area are organized, where necessary and at least twice a year, to discuss issues relating to the specific responsibilities shared by the contracting parties whose currency is the euro with respect to the single currency, other issues related to the governance of the euro zone and the rules that apply to the euro zone and strategic directions related to the conduct of economic policies to strengthen convergence within the euro zone.
3. The Heads of State or Government of the Contracting Parties other than those whose currency is the euro, which have ratified this Treaty, participate in the discussions of the summits of the euro zone concerning the competitiveness for the contracting parties, the modification of the global architecture of the euro zone and the fundamental rules that will apply to it in the future, as well as, if any and at least once a year, to discussions relating to specific issues concerning the economic coordination
4. The president of the euro zone summit ensures the preparation and continuity of the summits of the euro zone, in close collaboration with the President of the European Commission. The organ responsible for the preparation and follow-up of the Eurozone summits is the Eurogroup. His president may be invited to this capacity.
5. The President of the European Parliament may be invited to be heard. The president of the euro zone summit presents a report to the European Parliament after each summit of the euro zone.
6. The president of the summit of the euro zone holds the contracting parties other than those whose currency is the euro and the other Member States of the European Union closely informed about the preparation of these summits and their results.
Article 13
As set out in title II of the Protocol (No. 1) on the role of national parliaments in the European Union, annexed to the treaties of the European Union, the European Parliament and the national parliaments of the Contracting Parties together define the organization and promotion of a conference bringing together representatives of the relevant committees of the European Parliament and representatives of the relevant commissions of national parliaments to discuss budgetary policies and other issues governed by this Treaty.
Article 14
1. This Treaty shall be ratified by the Contracting Parties in accordance with their respective constitutional rules. The instruments of ratification shall be deposited with the General Secretariat of the Council of the European Union (hereinafter referred to as the depositary).
2. This Treaty comes into force on 1 January 2013, provided that twelve contracting parties whose currency is the euro have deposited their instrument of ratification, or on the first day of the month following the deposit of the twelfth instrument of ratification by a contracting party whose currency is the euro, the closest date being retained.
3. This Treaty shall apply from the date of its entry into force in the Contracting Parties whose currency is the euro that has ratified it. It applies to other contracting parties whose currency is the euro from the first day of the month following the date of deposit of their respective instrument of ratification.
4. By derogation from paragraphs 3 and 5, Title V is applicable to all Contracting Parties concerned from the date of entry into force of this Treaty.
5. This Treaty shall apply to Contracting Parties subject to an exemption within the meaning of Article 139, paragraph 1, of the Treaty on the Functioning of the European Union, or to an exemption referred to in the Protocol (No. 16) on certain provisions relating to Denmark annexed to the treaties of the European Union, which have ratified this Treaty, from the date on which the decision on the repeal of the said exemption takes effect, unless the relevant Contracting Party intends
Article 15
The Member States of the European Union other than the Contracting Parties may accede to this Treaty. The accession shall take effect at the time of deposit of the instrument of accession with the depositary, which shall notify the other contracting parties of the depositary. After the authentication by the Contracting Parties, the text of this Treaty in the official language of the Member State, which is also an official language and a working language of the institutions of the Union, is deposited in the archives of the depositary as an authentic text of this Treaty.
Article 16
Within a maximum of five years from the date of entry into force of this Treaty, on the basis of an assessment of the experience gained during its implementation, the necessary measures are taken in accordance with the Treaty on the European Union and the Treaty on the Functioning of the European Union, in order to integrate the content of this Treaty within the legal framework of the European Union.
Done in Brussels on 2 March 2012.
This Treaty, written in a single copy in German, English, Bulgarian, Danish, Spanish, Estonian, Finnish, French, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Dutch, Polish, Portuguese, Romanian, Slovak, Slovenian and Swedish, all texts being equally authentic, is deposited in the archives of the depositary, which gives a certified copy to each of them.
Done on 8 January 2013.
François Hollande
By the President of the Republic:
The Prime Minister,
Jean-Marc Ayrault
Minister of Foreign Affairs,
Laurent Fabius
