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INTERNATIONAL
AGREEMENT
ON
A REINT'ORCED
ECONOMIC UNION
THE
CONTRACTING
PARTIESCONSCIOUSof
the
obligation of
the Contracting
Parties,
as
Member
States
of
the European
Union,to
regard
their
economic
policies
as a
matter
of
commonconcern,
DESIRING
topromoteconditions
for
stronger economic
growthin
the
European
Union
and,
to
that
end,
to
developever-closer
coordinationof
economicpolicies
within
theeuro
area,
BEARINGIN
MIND
that
the
coordinationof
the economic
policiesof
theContracting Parties,
as
Member
States
of
the European
Union,
is based on
the objective
of
soundand sustainable
governmentfinances
as
a
means
of
strengtheningthe conditions
forpricestability
and
for
strong
sustainable
growthunderpinned by
finarrcial stability,
thereby supportingthe achievement
of
theUnion's objectives
for
sustainable
growth
and
employment,
BEARING IN
MIND
that
the need
for
governmentstoprevent
a
government
deficit
becoming
excessive
is
of
an essential
importance
to
safeguard
the
stabilityof
the euro
area
as
a
whole,
and
accordingly
requires
the
introduction
of
specific rules
to
address
this
need,
inciuding
the
need
totake
necessary
correctiveaction,
CONSCIOUS of
theneed
to
ensure
that
their deficits
remain
below
3
o/o
of
their
gross
domesticproduct
at
marketprices
and
thatgovernment
debtis
below,
or
sufficiently
declining
towards,60
oZ
of
their
gross
domesticproduct
at
marketprices,
RECALLING
that
the Contracting Parties,
as
Member
States
of
the European
Union,
should
refrainfrom
adopting
any measure
which
could
jeopardisethe attainment
of
the
Union's
objectivesin the
framework of
theeconomic union, notably
the
practice
of
accumulatingdebt outsidethe
general
govemment
accounts,
BEARING IN
MIND
that
the Heads
of
State
or
Government
of
the
errroarea
Member
States
agreed
on
9December
2011on
a
reinforced architecture
for
Economic
and
MonetaryUnion, building
uponthe
European
Treaties
and
facilitating
the implementation
of
measures
taken
on
the
basis
of Articles
l2l,
126
and
136
of
the Treaty
on
the
Functioning of
theEuropean
Union,
 
BEARINGIN
MIND
thatthe objective
of
the
Heads
of
State
or Government
of
the
euro
area
I
Member
States
and
of
other
Member
States
of
the
European
Union
remains
to
incorporate
the\
provisions ofthis
Agreement
as
soon
as
possible
into
the Treatieson
which
theEuropean
Union
is
lfounded.
I
1
TAKING
NOTE,inthis
context,
of
the
intentionof
the
EuropeanCommission
to
present
furtherlegislative
proposals
within
the
frameworkof
the
Union
Treatiesregarding
a
mechanism
of
ex
ante
reporting of
debtissuance
plans
of
the
Member
States
of
theEuropean
Union,
a
procedure
of
""oro-i"
partnershipprogrammes
detailing
structuralreforms
for
euro
area
Member
States
in
excessive
deficit
procedure
as
well
as a
newcoordinationprocedure
at
the
levelof
the
ewo
area
for
major
economic
policyreform
plans,
TAKING
NOTE
that, when
reviewing
and
monitoring
the budgetarycommitments
under
this
Agreement,theEuropeanCommission
wiil
act
within
the
framework
of
itspowers
as
provided
by
theTreaty
on
the
functioningof
the European
Union,inparticular
Articles
121,126
and
136
thereof,
NOTING
inparticular
that,
for
the
application
of
the
budgetary "BalancedBudget
Rule"
described
in
Article
3
of
thisAgreement,this
monitoring
will
bemade
throughthesettingup
of country
specific
reference
values
and
ofcalendarsofconvergence,
as
appropriate,
for
each
Contracting
Party,
NOTING
thatcompliance
with
the
obligation
to
transpose
the"BalancedBudget
Rule"into
national
legal
systemsat
constitutional
or equivalent
level
should
be
subject
to
the
jurisdiction
of
the
CourtofJusticeof
theEuropean
Union,
in
accordance
withArticle
273
of
the
Treaty
on
the
Functioningof
the European
Union,
RECALLING
the
need
tofacilitate
theadoption
of
measures
underthe
excessive
deficit
procedure
of
theEuropean
Union
for
euro
area
Contracting
Partieswhose
planned
or
actualgovemment
deficitto
gross
domesticproduct
exceeds
3olo,
whilst
strongly
reinforcing
the
objectiveofthat
procedure,namely
to
encourageand,
if
necessary,
compelthe
Member
State
concemed
to
reduce
a
deficitwhichmight
be
identified,
RECALLING
the
need
for
those
Contracting
Parties
whosegovernment debt
exceeds
the60 %referencevalue
to
reduce
it
atan average
rate
of
one
twentiethperyear
as a
benchmark,
RECALLING
the
agreement
of
theHeads
of
State
or Government
of
theeuro
area
Member
States
on26
October
2011
to improve
the
governance
of
theeuro
area,
including
the
holdingof
at least
twoEuro
Summit
meetings
peryear,
as
well
as
the
endorsement
of
the
Euro
Plus
Pact
bythe
Heads
of
State
or Government
of
theeuro
area
Member
States
and
of
other
Member
States
of
theEuropean
Union
on25March2011,
!
]
I
!
x
\
 
STRESSINGtheimportance
of
the
Treaty
establishingthe European
Stability
Mechanism
as
an
element
of
a
global
strategy
to
strengthen
theEconomic
and
MonetaryUnion,
HAVE
AGREEDUPON
the
following
provisions,
TITLE
I
PURPOSE
AND
SCOPE
Article
1
1.
By
this Agreement,
the
Contracting
Parties,
which
are
Member
States
of
theEuropean
Union,
agree
to
strengthen
their
budgetary
discipline
and
toreinforce
their
economic
policy
coordination
andgovemance.
2.
The
provisionsof
thisAgreementshallapply
to
the Contracting
Parties
whosecurrencyisthe
euro.
Theymay
also
applyto theother Contracting
Parties,
underthe
conditions
set
out
in
Article
14.
TITLE
II
CONSISTENCY
AND
RELATIONSHIP
WITH
THE
LAW
OF
THEI-INION
Article
2
l.
ThisAgreementshall
be
appliedbythe Contracting
Parties
in conformity
with
the Treaties
on
which
the
European
Union
is founded,
inparticular
Article
4(3) of
the TreatyonEuropean
Union,
and
with
European
Union
law.
2-
The
provisions
of
this
Agreement
shalt
apply
insofar
as
they
are
compatible
with
the
Treaties on
which
the
Union
isfounded
and
with
European
Unionlaw.They
shallnotencroachuponthe
competences
of
the
Unionto
act
in
the
area
of
the economic
union.In
accordance
with
the
ciselaw of
the Court
of
Justice
of the
European
Union,
European
Unionlaw
has
precedence
over
the
provisions
of
this Agreement.
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