FOLLOWING RATIFICATION FROM Finland yesterday, the Fiscal Compact will enter into force on 1 January 2013.
The agreement required ratification by 12 euro area Member States before it could become legally binding. It has now been ratified by Austria, Cyprus, Germany, Denmark, Estonia, Spain, France, Greece, Italy, Ireland, Lithuania, Latvia, Portugal, Romania, Finland and Slovenia.
The treaty, which was signed on 2 March by the leaders of 25 EU nations, introduces rules for stronger fiscal discipline and stricter surveillance within the euro area. It will bring with it a “balanced budget rule” meaning national budgets must be in balance or in surplus.
Countries have until 1 January 2014 to incorporate the balanced budget rule into their legal systems and/or constitutions.
The necessary steps to incorporate the provisions of the new treaty into the legal framework of the EU are to be taken within five years of its entry into force.
Earlier this year, Ireland held a referendum for the electorate to decide if the country should ratify the treaty. It was passed with a Yes vote of more than 60 per cent.
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