Euro Pact

Euro Pact

16 EU member states have established "A Pact for the Euro" in a summit in Brussels 11 March 2011.

24 March 2011 another summit formally approved the Pact and included non-Euro countries as members under the nick name: Euro+ Pact. Only UK, Sweden, Hungary and the Czech Republic decided to stay outside the Pact.

The Pact aims at strengthening the economic governance in the EU and include measures for wages/productivity, public wages, labor market reforms, tax reforms, pensions/demography, and health care and social benefit systems. Prime Ministers decide. Implementation through the normal EU decision-making process.

The Lisbon Treaty does not permit the EU to decide on salaries and pensions. The Euro Pact may allow the EU to decide on these new topics:

­"It will involve a special effort going beyond what already exists and include concrete commitments and actions that are more ambitious than those already agreed, and accompanied with a timetable for implementation. These new commitments will thereafter be included in the National Reform and Stability Programmes".

"Common objectives will be agreed upon at the Heads of State or Government level."

Article 136 TFEU may be used for the implementation of the aims decided more informally among the Prime Ministers in the Euro Pact.

The Article allow the Euro-Council (All member states with the Euro as their currency) to decide on budgetary discipline and economic guidelines. Here, the Commission proposes and the Euro-Council decide by qualified majority among them.

The European Parliament has no say. The German minister of finance Wolfgang Schaüble has proposed a special parliament for Eurozone member states.

 

See also Economic and Monetary Union 


In addition to the issues mentioned above, attention will be paid to tax policy coordination.

Direct taxation remains a national competence. Pragmatic coordination of tax policies is a necessary element of a stronger economic policy coordination in the Euro area to support fiscal consolidation and economic growth.

In this context, Member States commit to engage in structured discussions on tax policy issues, notably to ensure the exchange of best practices, avoidance of harmful practices and proposals to fight against fraud and tax evasion. 

Developing a common corporate tax base could be a revenue neutral way forward to ensure consistency among national tax systems while respecting national tax strategies, and to contribute to fiscal sustainability and the competitiveness of European businesses.