Analytics, Budget, Economics, EU – Baltic States, Financial Services, Legislation, Lithuania

Photo: president.lt

Though the Treaty is binding on the euro area it has been acceded to by all EU countries, except the United Kingdom and the Czech Republic. The fundamental rule of the Treaty, the so-called golden rule, will obligate the member states to seek that their budget is balanced or in surplus (with the annual structural deficit not exceeding 0.5 % of the gross domestic product at market prices). This rule is be transposed into national legal systems, reported BC presidential prsss service.

According to the President, once provisions concerning fiscal discipline take effect in national laws they will prevent irresponsible politicians from wasting and irresponsible dealing with their country's finances.

Dalia Grybauskaitė said that Europe, by signing the Treaty, expressed its strong political will to deal with finances in responsible manner sending a clear message to international financial markets that the policy it pursues can be trusted

"The Treaty's importance for Europe is strategic and long-term. Fiscal discipline becomes not a declaration but a legal commitment of each contracting party. This is a serious signal for international markets and a guarantee of economic stability. Lithuania is truly determined to abide by the underlying principles as it is already doing, likewise the whole Baltic and Scandinavian region. This is our philosophy and a responsible approach of all Nordic-Baltic countries to their economies," the President said before signing the Treaty.

The contracting parties pledge to discuss and, if necessary, coordinate ex ante the intended major reforms. They will also be obliged to report of their debt issuance plans.

The Treaty also provides for informal Euro Summit meetings twice a year. The contracting parties other than euro area countries, which have ratified this Treaty, will be invited to such meetings at least once a year.

The Treaty will enter into force on 1 January 2013, following the deposit by twelve contracting parties whose currency is the euro of their instrument of ratification. The contracting parties other than euro zone countries will have to declare of their intention to be bound by all or part of the provisions before adoption of the euro. Their decision will have to be declared during ratification of the Treaty.

According to the President, while singing this Treaty now Lithuania declares its strong political will to observe fiscal discipline.