Integrating Fiscal Compact into EU

The least controversial proposal in the Commission’s reform package is
probably the integration of the “substance” of the Treaty on Stability,
Coordination and Governance (or just the Fiscal Compact, the treaty’s key
chapter) into EU law. Similar to the ESM, the Treaty was signed in 2012 against
the background of the European sovereign debt crisis as an intergovernmental
treaty.

The implementation into EU law is explicitly foreseen in January 2018.
— But even if in principle the legal status of the Fiscal Compact is
strengthened as part of the EU treaties, experience has shown that in
practice, also within the EU’s institutional framework, the Commission has
very limited power in enforcing budget discipline on member countries – and
where it has the power it has been less consistent and leaned toward a
more flexible and political interpretation of the rules. At the same time,
concerns based on press reports a few days ago that the Commission’s
reform package might contain proposals to weaken the fiscal criteria of the
Stability and Growth Pact did not turn out to be well founded 7.