UK Markets close in 2 hrs 41 mins
  • FTSE 100

    6,918.06
    -87.33 (-1.25%)
     
  • FTSE 250

    16,889.71
    -431.26 (-2.49%)
     
  • AIM

    806.08
    -7.90 (-0.97%)
     
  • GBP/EUR

    1.1217
    +0.0039 (+0.35%)
     
  • GBP/USD

    1.0870
    -0.0015 (-0.1391%)
     
  • BTC-GBP

    17,684.40
    +42.60 (+0.24%)
     
  • CMC Crypto 200

    439.42
    +10.64 (+2.48%)
     
  • S&P 500

    3,719.04
    +71.75 (+1.97%)
     
  • DOW

    29,683.74
    +548.75 (+1.88%)
     
  • CRUDE OIL

    82.08
    -0.07 (-0.09%)
     
  • GOLD FUTURES

    1,658.20
    -11.80 (-0.71%)
     
  • NIKKEI 225

    26,422.05
    +248.07 (+0.95%)
     
  • HANG SENG

    17,165.87
    -85.01 (-0.49%)
     
  • DAX

    11,985.02
    -198.26 (-1.63%)
     
  • CAC 40

    5,680.15
    -84.86 (-1.47%)
     

Factbox-Ten key dates in the life of the euro budget pact

·3-min read
Euro currency bills are pictured at the Croatian National Bank in Zagreb

By Jan Strupczewski

BRUSSELS (Reuters) - European Union finance ministers will start discussions on Saturday on a fourth reform of the EU's fiscal rules known as the Stability and Growth Pact, which underpin the value of the euro currency.

The pact is complex but is built on two crucial principles: an upper limit for a country's national budget deficit, and an upper limit for its total public debt. Below are key dates in its often turbulent history.

1992

EU countries sign the Treaty of Maastricht, establishing a ceiling for national budget deficits at 3% and for debt at 60% of national output - with a discipline procedure for breaches.

1995

German Finance Minister Theo Waigel proposes countries adopting the euro agree to toughen rules on budget deficits and impose financial sanctions against deficit violators.

1997

Stability and Growth Pact rules are written up formally as regulations so that governments can coordinate fiscal policy in the soon-to-be-launched monetary union.

1999

To great fanfare, the euro currency is introduced in a historic moment for European integration.

2002

Only three years later comes the first major challenge to the pact's credibility as euro founders France and Germany run deficits above the 3% limit. They are requested to cut them.

2003

But rather than fall, the deficits of France and Germany rise further above the limit. The Commission asks the council of EU finance ministers - essentially, a grouping of all the EU national capitals - to approve harsher disciplinary action against Paris and Berlin. But the two countries organise a blocking minority and prevent tougher steps against them.

2004

The European Commission goes to the EU's top court to sue the council of finance ministers for blocking pact rules. It wins, but partly only on procedural grounds.

2005

In the aftermath, the EU reforms the rules for the first time. Crucially, a new set of goals give more leeway to national capitals taking into account the cyclical and structural factors in their deficits. Governments get more time to cut excess gaps and cannot be disciplined for minor or temporary breaches.

2011

Amid a sovereign debt crisis triggered after Greece hid the dire state of its finances from pact monitors, the rules are reformed again. Enter the so-called "six-pack", named after the six regulations that broaden the scope for fines and introduce new debt-cutting requirements, government spending ceilings and the monitoring of "excessive imbalances" in national economies.

2013

Still reeling from the sovereign debt crisis and keen to prevent a new one, the EU amends the rules yet again through two regulations, this time dubbed the "two-pack". The main change is that every year by Oct. 15, euro zone governments have to send to the Commission the main assumptions of their budgets for the following year for vetting whether they are in line with EU rules. If not, the Commission can demand a new budget.

(Reporting by Jan Strupczewski; Editing by Emelia Sithole-Matarise)