THE PRO AND CONS OF THE NEW TREATY ON STABILITY, COORDINATION AND GOVERNANCE IN THE ECONOMIC AND MONETARY UNION

Abstract: In our study, using a descriptive research methodology based on survey and data interpretation, we are trying to state our opinion regarding the pro and cons of the Fiscal Compact, wheather our country made a step forward towards fiscal stabilization or a step backwards towards the space for maneuver of the fiscal policy. Stability and Growth Pact, signed in Amsterdam in 1997, maintained the two limits set by the Maastricht Treaty, signed in 1992, namely those set within 3% of GDP for budget deficit and 60% of GDP for public debt, and established at the same time the regulatory framework for the coordination of national fiscal policies in the EMU. Medium-term objective, enshrined in the Stability and Growth Pact, is for the budgetary position of the Member States of the euro zone to be "close to balance or in surplus" – and to enable them to deal with normal cyclical fluctuations without exceeding effectively the 3% of GDP budget deficit. Achievement of the medium-term objective requires rapid evolution towards a sustainable situation, able to generate sufficient fiscal space for the promotion of discretionary fiscal policy measures - such as those embodied in the increase of budgetary allocations for investments in infrastructure.