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Sixpack (EU law)
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Sixpack (EU law)
Within the framework of EU economic governance, Sixpack describes a set of European legislative measures to reform the Stability and Growth Pact and introduces greater macroeconomic surveillance, in response to the European debt crisis of 2009. These measures were bundled into a "six pack" of regulations, introduced in September 2010 in two versions respectively by the European Commission and a European Council task force. In March 2011, the ECOFIN council reached a preliminary agreement for the content of the Sixpack with the commission, and negotiations for endorsement by the European Parliament then started. Ultimately it entered into force 13 December 2011, after one year of preceding negotiations. The six regulations aim at strengthening the procedures to reduce public deficits and address macroeconomic imbalances.
All 27 EU member states are committed by the paragraphs in the EU Treaty, referred to as the Stability and Growth Pact (SGP), to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year have a declining trend. Each year all EU member states are obliged to submit a SGP compliance report for the scrutiny and evaluation of the European Commission and the Council of Ministers, that will present the country's expected fiscal development for the current and subsequent three years. These reports are called "stability programmes" for eurozone Member States and "convergence programmes" for non-eurozone Member States, but despite having different titles they are identical in their content. After the reform of the SGP in 2005, these programmes have also included the Medium-Term budgetary Objectives (MTOs), being individually calculated for each Member State as the medium-term sustainable average-limit for the country's structural deficit, the Member State is also obliged to outline the measures it intends to implement to attain its MTO. If the EU Member States do not comply with both the deficit limit and the debt limit, a so-called "Excessive Deficit Procedure" (EDP) is initiated along with a deadline to comply, which outlines an "adjustment path towards reaching the MTO".
Four of the six instruments in the Sixpack are used to conduct further reforms of the "Stability and Growth Pact" (SGP), focusing on improving compliance. These reforms do not change any of the conditions already imposed by the SGP, but aim to enforce greater budgetary discipline among the Member States of the euro area by stipulating that sanctions come into force earlier and more consistently. For example, when a country against which an excessive deficit procedure was opened fails to take necessary measures to eliminate its deficit, an interest-bearing deposit equalling 0.2% of GDP is due. With continued non-compliance the deposit is converted into a fine. In addition, automatic sanctions are triggered based on a different voting mechanism in the Council of the European Union. At the same time the national accounts statistics and forecast practices of Member States are adjusted to comply with EU standards. If it is determined that a country has reported false data, an additional fine may be imposed.
The remaining two pieces of legislation in the Sixpack relate to the Macroeconomic Imbalance Procedure, an early warning system and correction mechanism for excessive macroeconomic imbalances.
Specifically, the EU sixpack relates to the following regulations and guidelines:
Development of the Eurozone fiscal union can be described as the fourth stage of the EMU, proposed to be implemented for the Eurozone in the near future.[citation needed] The argument presented was, that Member States sharing the same currency will also need more integration of fiscal policies (closer collaboration on fiscal matters) and tighter budgetary surveillance, to prevent and combat the occurrence of financial instability caused by macroeconomic imbalances inside the monetary union.
A step towards increased fiscal discipline of member States of the European Union was taken on 23 November 2011, when the European Commission proposed the two Regulations (also known as the "Two-pack"), which introduced additional coordination and surveillance of budgetary processes for all eurozone members. The additional regulations complement the SGP's requirement for surveillance, by enhancing the frequency of scrutiny of Member States' policymaking, but do not place additional requirements on the policy itself. The frequency of monitoring will depend on the economic health of the member state. As of the entry into force of the regulations, all eurozone member states are obliged to respect "Regulation 1", while "Regulation 2" – demanding even more in depth and frequent monitoring – will only be triggered if the state receive macroeconomic financial assistance or has an ongoing Excessive Imbalance Procedure (EIP):
The two above regulations apply towards all eurozone member states, and together form a stronger budgetary governance with a more tight system of monitoring and surveillance by the European Commission. According to article 136 in the Treaty on the Functioning of the European Union, the enactment and entry into force of the regulations required the council's adoption in agreement with the European Parliament, subject to a qualified majority of the 17 eurozone member states. The ECOFIN council reached a final agreement with the Parliament's Permanent Representatives Committee on 20 February 2013. The parliament then adopted the two-pack on 12 March, with the first regulation passed by 526 voting for towards 86 against and 66 abstentions, and with the second regulation passed by 528 voting for towards 81 against and 71 abstentions. Subsequently, the two-pack was finally adopted by the Council of the European Union on 13 May, with publication of the legal acts in the Official Journal of the European Union on 27 May, and the official legal entry into force on 30 May 2013. Most provisions will apply from the date of entry into force. In regards of the increased reporting frequency for member states with an open EDP, and the requirement to set up independent national bodies monitoring compliance with the fiscal rules, these article provisions will however only apply starting from 31 October 2013.
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Sixpack (EU law)
Within the framework of EU economic governance, Sixpack describes a set of European legislative measures to reform the Stability and Growth Pact and introduces greater macroeconomic surveillance, in response to the European debt crisis of 2009. These measures were bundled into a "six pack" of regulations, introduced in September 2010 in two versions respectively by the European Commission and a European Council task force. In March 2011, the ECOFIN council reached a preliminary agreement for the content of the Sixpack with the commission, and negotiations for endorsement by the European Parliament then started. Ultimately it entered into force 13 December 2011, after one year of preceding negotiations. The six regulations aim at strengthening the procedures to reduce public deficits and address macroeconomic imbalances.
All 27 EU member states are committed by the paragraphs in the EU Treaty, referred to as the Stability and Growth Pact (SGP), to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year have a declining trend. Each year all EU member states are obliged to submit a SGP compliance report for the scrutiny and evaluation of the European Commission and the Council of Ministers, that will present the country's expected fiscal development for the current and subsequent three years. These reports are called "stability programmes" for eurozone Member States and "convergence programmes" for non-eurozone Member States, but despite having different titles they are identical in their content. After the reform of the SGP in 2005, these programmes have also included the Medium-Term budgetary Objectives (MTOs), being individually calculated for each Member State as the medium-term sustainable average-limit for the country's structural deficit, the Member State is also obliged to outline the measures it intends to implement to attain its MTO. If the EU Member States do not comply with both the deficit limit and the debt limit, a so-called "Excessive Deficit Procedure" (EDP) is initiated along with a deadline to comply, which outlines an "adjustment path towards reaching the MTO".
Four of the six instruments in the Sixpack are used to conduct further reforms of the "Stability and Growth Pact" (SGP), focusing on improving compliance. These reforms do not change any of the conditions already imposed by the SGP, but aim to enforce greater budgetary discipline among the Member States of the euro area by stipulating that sanctions come into force earlier and more consistently. For example, when a country against which an excessive deficit procedure was opened fails to take necessary measures to eliminate its deficit, an interest-bearing deposit equalling 0.2% of GDP is due. With continued non-compliance the deposit is converted into a fine. In addition, automatic sanctions are triggered based on a different voting mechanism in the Council of the European Union. At the same time the national accounts statistics and forecast practices of Member States are adjusted to comply with EU standards. If it is determined that a country has reported false data, an additional fine may be imposed.
The remaining two pieces of legislation in the Sixpack relate to the Macroeconomic Imbalance Procedure, an early warning system and correction mechanism for excessive macroeconomic imbalances.
Specifically, the EU sixpack relates to the following regulations and guidelines:
Development of the Eurozone fiscal union can be described as the fourth stage of the EMU, proposed to be implemented for the Eurozone in the near future.[citation needed] The argument presented was, that Member States sharing the same currency will also need more integration of fiscal policies (closer collaboration on fiscal matters) and tighter budgetary surveillance, to prevent and combat the occurrence of financial instability caused by macroeconomic imbalances inside the monetary union.
A step towards increased fiscal discipline of member States of the European Union was taken on 23 November 2011, when the European Commission proposed the two Regulations (also known as the "Two-pack"), which introduced additional coordination and surveillance of budgetary processes for all eurozone members. The additional regulations complement the SGP's requirement for surveillance, by enhancing the frequency of scrutiny of Member States' policymaking, but do not place additional requirements on the policy itself. The frequency of monitoring will depend on the economic health of the member state. As of the entry into force of the regulations, all eurozone member states are obliged to respect "Regulation 1", while "Regulation 2" – demanding even more in depth and frequent monitoring – will only be triggered if the state receive macroeconomic financial assistance or has an ongoing Excessive Imbalance Procedure (EIP):
The two above regulations apply towards all eurozone member states, and together form a stronger budgetary governance with a more tight system of monitoring and surveillance by the European Commission. According to article 136 in the Treaty on the Functioning of the European Union, the enactment and entry into force of the regulations required the council's adoption in agreement with the European Parliament, subject to a qualified majority of the 17 eurozone member states. The ECOFIN council reached a final agreement with the Parliament's Permanent Representatives Committee on 20 February 2013. The parliament then adopted the two-pack on 12 March, with the first regulation passed by 526 voting for towards 86 against and 66 abstentions, and with the second regulation passed by 528 voting for towards 81 against and 71 abstentions. Subsequently, the two-pack was finally adopted by the Council of the European Union on 13 May, with publication of the legal acts in the Official Journal of the European Union on 27 May, and the official legal entry into force on 30 May 2013. Most provisions will apply from the date of entry into force. In regards of the increased reporting frequency for member states with an open EDP, and the requirement to set up independent national bodies monitoring compliance with the fiscal rules, these article provisions will however only apply starting from 31 October 2013.
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