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Stability And Growth PactThe Stability and Growth Pact is an agreement by European Union member states related to their conduct of fiscal policy, to facilitate and maintain Economic and Monetary Union. It is based on Articles 99 and 104 of the European Community Treaty (with the amendments adopted in 1993 in Maastricht), and related decisions. It consists of mutual surveillance of fiscal positions and an excessive deficit procedure. ERM II was launched with a firm Excessive Deficit Procedure, which did succeed in converging exchange rate variations and eventually the creation of the Euro Single European Currency in the "Eurozone" countries. Future negotiations are likely to concentrate on the mechanisms of the Excessive Deficit Procedure, which is where the broad aspirations of the Treaty text are realized. "The Stability and Growth Pact (SGP) is the ... answer to concerns on the continuation of budgetary discipline in Economic and Monetary Union (EMU). Adopted in 1997, the SGP strengthened the Treaty provisions on fiscal discipline in EMU foreseen by articles 99 and 104, and the full provisions took effect when the euro was launched on 1 January 1999." - from Commission page at link below. The Pact has been criticised by some as being insufficiently flexible and needing to be applied over the economic cycle rather than in any one year. More eurosceptic commentators assert that it promotes neither stability nor growth, and remark (correctly) that it has been applied inconsistently, after the Council of Ministers failed to apply sanctions against France and Germany. The then President of the European Commission Romano Prodi described it as "stupid", but was still required by the Treaty to seek to apply its provisions. As with most other pre-existing treaties, its provisions are included unchanged in the draft European Constitution. Bibliography Brunila, Anne, Marco Buti & Daniele Franco, The Stability and Growth Pact, Palgrave, 2001. External link
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