TREATY ON STABILITY, COORDINATION AND GOVERNANCE IN THE ECONOMIC AND MONETARY UNION AS AN INSTRUMENT FISCAL POLICY COORDINATION IN THE EUROPEAN UNION

The aim of this study is to assess the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union as an instrument fiscal policy coordination and identify some of the consequences that potentially carries its use. All EU-members conduct independent fiscal policies, regardless of whether they are members of the euro zone or not. It is now known that one of the immediate causes of the crisis in part the euro zone countries was permanent crossing fiscal convergence criteria as a result of an erroneous and irresponsible fiscal policy. Used so far forms of coordination of fiscal policies were too weak to prevent the destabilization of the Member States' public finances. The crisis has become the impetus for build deeper integration in the area of fiscal policy. Treaty on Stability, Coordination and Management, called briefly Fiscal Compact or TSCG, is another instrument of fiscal policy coordination in the European Union. In large part it is a repetition and a little evolution of the Stability and Growth Pact. This study indicated some disadvantages of the Fiscal Compact, what has the potential to lead to its inefficiency. These are: reference to the structural balance, which is a relatively small transparency budgetary rule for the public opinion and because of the existence of several competing methods for its calculation; the Treaty provides for the possibility of "extraordinary circumstances" and does not specify the term balanced budget, which is a softening of fiscal discipline and opens opportunities for political bargaining; financial penalties imposed on overdebt governments will not improve their situation. The Treaty on Stability, Management and Coordination does not constitute a breakthrough in the coordination of fiscal policies in the European Union.