24th February 2014

Economic Policy: Government takes step for accepting the Fiscal Compact

The Government announced that it would initiate a discussion in taking steps that would bring about ratification of the Treaty on stability, coordination, and governance within the Economic and Monetary Union (the so-called Fiscal Compact) and primarily the Czech accession to the Treaty. In general, the Treaty obliges member states to fiscal responsibility. The Treaty enables the European Commission to constantly supervise member states’ budgets, their structural composition, and additional indicators. It transposes forthcoming provisions of the Stability and Growth Pact (primarily convergence criteria of 3.0 per cent of general deficit to GDP). Further, the Treaty also puts strict rules on other aspects of compounding the national budgets.

The Government of Prime Minister Bohuslav Sobotka has previously stated that it would strive for fulfilling duties connected with the membership of the Czech Republic in the European Union. The ratification of the Treaty would impose any duty concerning the common currency on the Czech Republic as the Czech Republic is not a member of the Euro-zone.

The Government discussed the possibility to ratify the Treaty and already indicated that the ratification should take place in the second half of the 2014. The Government has also already stated that it would cease applying the Czech exception from Charter of Fundamental Rights of the European Union.

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Members of the American Chamber of Commerce in the Czech Republic