Most reports oin the Fiscal Pact have been fairly scetchy regarding its contents (perhaps delibertely so?). I haven't come across a summary of the deal.
From what I gather;
0.5% Structural Budget Deficit
60% Dept/GDP ratio
Various penalties if these targets are breached
Economic 'coordination'
No burning of bondholders, ever
Can anyone shed more light on this deal?
These are in there:Originally Posted by Joeyjoejoe
0.5% Structural Budget Deficit
60% Dept/GDP ratio
Various penalties if these targets are breached
These aren't:
Economic 'coordination'
No burning of bondholders, ever
Also, no access to ESM bailouts without ratification of this one.
Never let the best be the enemy of the good.
Isn't a fiscal pact is a cure for diarrhoea or something?
Links to summaries on this thread - Treaty on Stability Coordination & Governance in the EMU - commentary links.
and a link to the treaty is on this OP - http://www.politics.ie/forum/europe/...1-01-12-a.html
I'd encourage you to have a look at the treaty yourself before diving into other people's commentaries. It is not very long and is mostly in plain English. (There are hairy bits).
Perhaps your mind was on other things and you were thinking of a fistula or alternately a fistule sweetie.
There is also a requirement that countries with > 60% debt to GDP must reduce it by 1/20 each year.
That means a surplus every year, so the 3% deficit limit and 0.5% structural deficit limits are meaningless.
A country at 100% debt to GDP would be 40% over, so would have to run a surplus of 2% a year to pay back 1/20 of the amount they are over the limit and it would take 20 years to hit the 60% limit.
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Hang on......I was reliably informed that no one ever actually pays down the debt, they just roll it over and grow their way out of it. Ah well, yet another state-loving myth tossed on the fire....
You missed this so? http://www.politics.ie/forum/europe/...1-01-12-a.html
Bu, indi bütün uşaq mavi var!
Actually, fair enough, with growth, we could run a deficit. I stand (sit) corrected.
However, allowing a 3% deficit and a 2% reduction in debt would require a 5% growth rate.
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What exactly is in the EU Fiscal Pact?
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