Fiscal Compact

The EU Heads of State and Government (apart from Great Britain and the Czech Republic) entered into an agreement to improve the budgetary discipline of the Contracting Parties. The Contracting Parties undertake to transpose a debt brake into their national legal systems and to facilitate the imposition of sanctions in the deficit procedure.


The aim to tighten budgetary discipline in EU states and the agreed upon measures are mainly a step in the right direction. The great expectations placed in this aim will, however, be disappointed: the Fiscal Compact ensures neither the introduction of the debt brake into national law nor its application. In particular, the other Contracting Parties do not the means to act where single governments do not comply with the rules of their own debt brake. Even in Germany, where the Constitution and constitutional courts enjoy a particularly high degree of importance compared to other EU countries, in the past there have been unconstitutional budgets nevertheless.